Many people look forward to retirement, and want to do it the first chance they get.
The pandemic has caused a lot of exhaustion among workers, and many want to know how to retire as early as possible.
There are ways to try to, but it’s important to be aware of every factor that goes into retirement.
Everyone’s Social Security benefits are based on their own individual circumstances.
Here are 4 ways to help you get to retirement early
Keep track of your daily and life expenses
In order to know what you’ll need to afford in retirement, you need to know what you pay for today.
It’s not about saving your money or slashing costs, but paying attention what it is you need or want.
Keep track in a spread sheet and use bank statements to help track your spending.
If you do this long enough, you’ll see exactly what it is you’ll need each month to cover your typical expenses.
You may notice you’re wasting money in areas you don’t want to, like ordering food often.
Once you get everything straightened out, you’ll see exactly what you’ll need to cover expenses while remaining comfortable.
Save money faster
Retiring requires having money saved up, and that means if you want to retire early you need to save faster.
This means you never even saw the money and won’t necessarily feel tempted to spend it.
This can also be done by setting up automatic payments to come out of your checking account each month.
How much you save and how fast is a great determiner for when you can retire.
A person with more savings is going to retire sooner than someone with less savings.
Boost your income
Making more money overall will help you both today to save and in the future for collecting Social Security.
While it may not be ideal for some, there are different ways to increase your paychecks.
You could attempt to get a raise where you currently work by asking or working toward one.
You may find a new position at another company that pays more.
Many people choose to find a side gig to bring in extra cash.
This can be freelance work, delivery services, or waiting tables.
If your side job involves you working for yourself, you could then open a self employment 401k.
Keep your tax bill low
One way to save more money is to do whatever you can to lower your tax bill.
One way is to save money on tax deferred accounts like a 401k, IRA, or HSA.
By putting money into these accounts, you can also lower your AGI which might make you eligible for more tax credits.
These include the child tax credit, saver’s credit, and ACA credits.
You may also write off losses you experienced with any investments to offset capital gains.