Maximize your income while you’re still working
There’s no correct approach to retiring early. It all depends on what works for every individual. Some early retirees decide to live in rural areas while others stick to big cities and make the most of their earning years there. For example, Livingston opted to earn as much as possible while living and working in New York, the most expensive city in the United States. For her, it was worth it to maintain her costs and expenses to a minimum but still enjoy life in the Big Apple.
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Consider the 4 percent rule
If you want to retire early and explore life outside the office, but don’t know where to start, here’s a starting point: the 4 percent rule, developed by financial planner William Bengen in 1994.
This rule can help you calculate how much you need to save in order to join the early retirees’ group. To put it simply, this rule of thumb says you can withdraw 4 percent of your retirement account each year in retirement and live a comfortable life. Carl, of the blog 1500days.com used the four percent rule to determine his retirement number and was happy to discover that if he wanted to, he could retire in no more, no less than 1,500 days.
Invest aggressively – if you’re younger
If you’re looking to quit your job sooner rather than later and explore other possibilities. Investing, for instance, could bring you a lot of money in a short period of time, facilitating your early retirement plans. And if things don’t go as planned, remember you can always go back to a 9 to 5 work schedule. “The way I look at it is, there’s a lot of time to recover if something disastrous happened on day one of retirement. The thing I would do is just go back to work or I could drive for Uber if I don’t want to work full time,” says the same Carl, of 1500days.com.
