Sean Casterline

3 Steps to Early Retirement

 Sean Donovan Casterline

Sean Donovan Casterline

Is it really possible to set up a plan for early retirement in three simple steps? Yes, it is. You can retire early. To succeed, you must stay committed to your goals and objectives. Your plan may change. Your investment choices may change. However, if you stick to the following basic principles, you will quickly increase the likelihood of early retirement.


1. Define When You Want to Retire

You must have an idea of the age you want to retire at. Again, it can change, but defining that age now will help you decide how much money you’ll need once you retire. It will also give you a goal to achieve and keep you on track.

Once you retire, it’s more than likely that you won’t have the same amount of expenses as you do now. You’re likely to have paid off your mortgage by the time you retire. If you have kids or will have kids, they’re most likely to be on their own. No longer having these expenses must be taken into consideration. So, does this mean you should lower the amount you think you’ll need each year of your retirement? Not exactly.

Think about what you want to do when you retire. Think about the places you’ll want to visit and the things you’ll want to do. Write them down. You’ll quickly see that these activities and destinations cost money, so you’ll have to account for that in your plan.


2. Use the 4% Rule

The 4% rule states that for every $100,000.00 in retirement savings, you would withdraw $4,000.00 each year of retirement. Therefore, if you expect to have a yearly retirement income of $60,000.00, you’ll need to have close to $1.5 million in your investment portfolio. Now, don’t be overwhelmed with this amount.

Part of your retirement income will include social security benefits. Once you hit 65, you’ll be able to enroll in Medicare. In addition, you may decide to sell your current home and choose a smaller dwelling. Make sure you account for these changes within your plan. Doing this will make that $60,000.00 target — or whatever target you choose — much more straightforward to attain.


3. Add to Your Income in Retirement

Most people envision a retirement where they never have to work another day in their lives. However, complacency often creeps in, and people sometimes choose to work part-time. You may very well decide to do the same. Perhaps you’ve always wanted to be a part-time teacher. Maybe you’ve always wanted to have your own little business. You may wish to generate rental income if you decide not to sell your house.

Focus on your main interests. Ask yourself how you can generate revenue from those interests. You’ll have plenty of time to make it work. You’ll keep yourself busy, earn extra income, and not pressure yourself to attain that $1.5 million investment portfolio. The key is to break down what you’ll need, what you’ll spend money on, and how you’ll keep yourself busy.


Attainable Retirement Goals

At Delta Capital Management, we understand how planning for retirement can often seem overwhelming. That’s why we’ve helped countless customers simplify their strategies. If you want to work with an investment advisor who will put your needs first, contact our team today.