Life with its work stress is taking a toll on everybody nowadays. Owing to tough timelines, targets, peer pressure, politics, work culture, and increasing competition among other factors, not many may wish to continue this grind for too long — they wish to retire early, retire rich, and live a blissful retired life.

But a blissful retirement costs money. This warrants the question:

Is an early retirement really possible?

The fact is: One cannot afford to retire early as per whims and fancies, unless there’s years of planning gone behind it, or you are abundantly wealthy. Besides, there’s no magic number for the corpus to live a blissful retired life, because each one’s needs, wants, and standard of living is different.

In India, the average retirement age is 60. But then again, the rising cost of living, especially in the urban regions, could push this number upwards in years to come. This would mean working for more number of years.

So, here are 8 things to do to retire early, and retire rich…
 

1. Be clear about the age you wish to retire:
   
   Recognising this will help you get your numbers right. Based on the assessment of a number of years or the time horizon before the financial goal of living a blissful retirement befalls, you would get a fair estimate of how much to save and invest each month – paying heed to life expectancy, inflation (both pre and post retirement), expenditure, rate of return, existing assets, among many other factors/variables – to logically build the desire retirement corpus.
    
2. Start saving and investing early:
   
   It always makes great sense to save for your retirement from the very day you start earning. Focus on following a strict budget, as it can facilitate additional saving. And remember, the earlier you start, the better it is.
   
   If you’re finding it difficult to save vide the means you make, trim down certain lifestyle expenses and do away with spending on frivolous things. Likewise, engage in prudent tax planning to reduce your tax outgo, as the avoidance of outflow which is an inflow, can help you invest your hard-earned money towards your retirement goal. You may also look for an additional source of income. Changing the job if it is not remunerating well can be considered. And even after you hang your boots, to fund post-retirement expenses, consider taking up a part-time job and/or monetising hobbies.
   
   Savings alone is not enough; you need to invest your hard-earning money prudently in wealth creating asset classes and investment avenues, for ‘x’ number of years before hanging up your boots, so you can achieve the goal of living a blissful retirement. The earlier you start saving and investing, the better is the compounding enabled by a longer time horizon.
   
   Equity mutual funds, Public Provided Fund, gold, are some of the investment avenues besides the monthly contribution to Employees Provident Fund (EPF) account. Have dedicated investment portfolio addressing to your retirement needs, and don’t mix it with other investment portfolios carved to meet other financial goals.
    
3. Keep your debts under check:
   
   Debt comes with an obligation to repay, and this potentially afflicts impact on the budgeting exercise. Too much debt can result in a situation of debt-overhang; it has a bearing on the amount money you will need to save for retirement and jeopardises the aim of living a comfortable retired life.
   
   So, if you’re taking personal loans, impulsively using credit cards; watch out! Likewise, don’t be house poor. Meaning, you buy a swanky house on a home loan even when you don’t need it, and repaying the loan and paying maintenance dues proves burdensome. This in effect disallows you to plan for other vital financial goals of life comfortably.
    
4. Give up unhealthy habits:
   
   Indulging in unhealthy food, drinks, and other vices can be hazardous to wealth and health. God forbid, if you go land up with a terminal illness, your family’s wellbeing could be jeopardised. It may even impair your goal of living an early rich retirement.
   
   Similarly, in the endeavour to make a quick buck if you’re indulge in gambling / speculative activities, holdback; it can be damaging for your wealth and health.
    
5. Plan for contingencies:
   
   Life, as you know, is not linear. It is a rollercoaster with surprising twist and turns, ups and downs. But to reduce the unnerving experience, planning for contingencies is a prudent thing to do (based on the premise of planning for the worst while hoping for the best).
   
   Ideally, one should maintain 6 months to 24 months of regular monthly expenses including EMIs in a savings bank account and/or liquid funds as contingency reserve and keep it untouched.
   
   Tomorrow, God forbid, a contingent event does crop up, you won’t have to dig into your retirement savings but sail through with your contingency reserve.
    
6. Don’t ignore insurance:
   
   The rising stress in today’s work life is responsible for a variety of ailments. Hence, make sure you’re optimally insured for health. On hospitalisation, a steep medical bill can drain your finances and can disrupt planning for retirement.
   
   Likewise, an optimal life insurance cover would ensure that your spouse and children’s financial future is protected when you pass away.
    
7. Consider spending your retired life in smaller towns:
   
   Living a ‘rich’ retired life as much to do with money as it does with the quality of your life. This is attributable to not only enjoying the materialism of city-life, but also by living out your golden years in smaller cities/towns, serving a cause, or pursuing your passions such as the arts, farming, gardening, education, etc. Basically, that which can make life after retirement a fulfilling experience.
   
   But while considering relocation to smaller cities / towns, take into account the standard of healthcare facilities where you plan to retire, because with old age illnesses are knocking at your door. The cost of living in smaller cities / towns is lower and helps in managing your post-retirement expenses. But again, it’s an individual lifestyle choice.
    
8. Seek professional help to draw a retirement plan:
   
   A Certified Financial Planner or a Certified Financial Guardian, who is a mark of trust and respect, can make your dream of retiring rich, retiring early, and living your golden years in bliss. They help by drawing a prudent financial plan, recognising your risk profile, other financial goals, aligning investments as per financial goals, defining asset allocation, selecting investment avenues, and reviewing your investment portfolio among many other things.
   
   So besides self-help, don’t hesitate to seek professional advice to make you dreams come true. Mind you, it’s worth the thousands you dole as fee today to fetch millions or billions tomorrow for your retirement. But ensure that you’re getting: unbiased, independent best advice and knowledge-based handholding on the path to wealth creation.
    

Retirement is a crucial financial goal of one’s life. Hence, involve your family because the financial decisions you take are going to have a far reaching impact on your family. Sit down with your spouse, your children …and discuss what you have in mind.

You can afford to retire early only when you…

✔ Follow a budget strictly and aren’t a spendthrift
✔ Have no debts to repay
✔ Have an adequate insurance
✔ Your family feels financially secured
✔ When you’ve planned for your children’s future – their education and marriage needs, or they are financially independent
✔ Have a robust retirement plan that is working towards achieving your goal

After all, you want to live well and enjoy the fruits of your life-long efforts in the second innings of life, isn’t it?

PersonalFN’s service, The Retirement Letter is a valuable source to plan your retirement. We’re sure it’ll be the epitome to live the golden years of your life in bliss. We highly recommend that you opt for “The Retirement Letter” because you dream retirement can be real.

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