Hands up if you want to work in your 70s.
Well, as we can all see, only Warren Buffett‘s hand is up! For the rest of us, the only work we want to be doing in our senior years is deciding the next vacation destination.
In fact, most Americans don’t want to retire relatively young. It’s a lofty dream, considering the amount of money needed for a comfortable retirement. It’s not impossible, though. In this article, you’ll find tips on how to retire early at 40.
Dive in!
Table of Contents
Start Planning for Retirement in Your Early 20s
If you’re well into your 30s and it’s now that you’re thinking about retiring, nothing short of a miracle is going to make that happen. Unless you win a mega jackpot or inherit a windfall, the earliest retirement age you can aim for is 60.
That’s because saving enough funds for retirement takes a lot of time. It doesn’t happen overnight, and there are net worth milestones you need to hit as you grow older. Learn about net worth goals by age and see if you’re behind or ahead.
You have to start making retirement plans as early as possible. Figure out how much you’ll need to save for retirement and start taking action.
Save Most of Your Salary
The vast majority of people expect to save for retirement from their employment income. If you’re employed, you’re not going to retire at 40 if you’re sending the bare minimum into your retirement accounts.
You have to be aggressive, which means saving as much of your disposable income as possible. This means making lifestyle compromises that make such a move possible. For example, you can decide to live in a cheaper neighborhood so that you don’t have to spend a lot of money on rent.
If possible, work multiple jobs. Increasing your income while keeping your living expenses as low as possible is the key to increasing your savable income.
Invest Like a Hedge Fund Manager
Hedge funds are known for using high-risk, high-return investing strategies.
Retiring at 40 requires you to invest like a hedge fund in your 20s and 30s. Investing in assets that have a higher ROI increases your chances of landing a windfall and calling it quits immediately.
There are real stories of currency and stock market investors who have hit a fortune after a successful trade. Nothing stops you from following a similar path.
However, keep in mind that investing in high-risk assets, and investing in general, is a double-edged sword. You can lose all your capital if you make bad investment decisions, so ensure you’re getting professional advice before committing your money.
How to Retire Early at 40 Simplified!
Everyone dreams of an early retirement, but not everyone realizes the dream. In fact, only a handful of people will ever retire young. You can be among these people if you’re deliberate and aggressive in your retirement planning.
This guide on how to retire early at 40 is barely enough to help you achieve this goal, but it’s a good place to start. Explore the finance section of our blog for more handy tips and advice.
