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How to retire early

Retirement  |  28/03/2017  |   5 min read

Spending more time with your family. Picking up a brand new hobby. Exploring exotic overseas destinations. However you paint it, retirement is a goal worth working towards. Starting early means you’ve got even more time and energy to enjoy it.

Unfortunately, there’s a big disconnect between those who want to retire early, and those whose finances will allow them to stop work. So how do you make it a reality? Read on.

What do early retirees have in common?

Those who successfully retire early aren’t just lucky, or from wealthy backgrounds. A US study found that early retirees fostered habits and abilities that allowed them to build their wealth sustainably over time.

The first is the mindset and discipline necessary for saving. Consistently choosing to save rather than spend – plus compound interest – means real wealth is built over decades.

Speaking of decades, early retirees are more likely to have set long-term goals and focused on them. There’s a psychological reason that this is difficult for many people. Our brains are hardwired for instant gratification and it doesn’t just affect our propensity to snack or hit the sales. Anything we can see, or at least visualise strongly, is much more attractive than anything that’s too far in the future to picture.

Of course, good habits in both these areas are less effective if they’re not shared by your spouse. A spender can undo much of the good work of a saver, even if their finances are not completely intertwined.

Then, there’s the advice factor. That study also found that those who retired early were more likely to have worked with a financial professional.

How to work towards a comfortable early retirement

Do you want to retire with time to enjoy your golden years? There are plenty of ways you can start building towards an early retirement.

1.    Make a plan

A financial plan helps you build a roadmap for the future. It should be holistic, and consider all your circumstances, including children and grandchildren. It also needs to account for spending changes in retirement.  

2.    Establish goals

If you’re someone who likes ‘instant gratification’ try breaking down your savings and investment goals in to bite-sized pieces. Instead of looking at one benchmark (likely in the millions of dollars), look at multiple small goals, and ascribe them labels. It can be  as simple as calling your salary sacrifice payments  your retirement travel fund.

3.    Invest wisely

Don’t allow your investment decisions to be driven by trends. Get to know your own risk appetite and tolerance. And always make sure that any individual investment is right for your personal circumstances and life stage.

4.    Manage your debt

It’s not fun or glamorous, but paying off debt should be a top priority. Every time you divert a dollar from paying off debt, you’re effectively charging yourself interest that you’ll have to deal with later in life.

5.    Set up multiple income streams

It’s important to consider possibilities and entitlements beyond your super, such as government benefits. By starting early, you may also be able to build other income sources such as cash-positive property or a share portfolio.


Want help making your early retirement dreams a reality? Speak to an Equip financial planner about your options, or join Equip at an upcoming Retirement Ready expo for more info and inspiration.


Disclaimer- This information is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the relevant Equip Product Disclosure Statement (PDS). Past performance is not an indication of future performance. Issued by Equipsuper Pty Ltd ABN 64 006 964 049 AFSL 246383.

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