Dodge these Early Retirement Pitfalls

[Darwin Feldman]

In order to retire early, our intention is to find a high-paying job where we can work hard. Working hard for hours on end can be constraining. Most working individuals feel that they do not own their time because they need to report on the job 8 hours every single day, sometimes even longer. Its for these reasons retiring early is a very attractive idea to most.

The truth is, a happy life isn't guaranteed by early retirement. Most have fallen into these retirement pitfalls and are getting a tough time getting back on track. Avoid the following if you are planning to retire early:

A shortage of preparation:

Many people would like to retire early but only a few get prepared for it. Plenty of problems may stem to lack of preparation. You need to realize that once you quit work, you stop making money. This may result to a significant drop in your cash inflow. Your earnings declined but your expenses will never disappear. Having to spend will be inevitable. And if you do not have enough, you will end up pennyless before you know it.

Should you want to give up work and retire at the time you're 50 then you've got to start saving, investing and setting up a secure financial state. If you don't want to be employed for the rest of your life, look for investments that will enable you to earn. You may invest in real estate, bonds or shares and other financing products that may be easily available to you. You do not want to become homeless after you retire so purchasing a house should be one of your utmost priorities too.

Splurging money at the early years of retirement:

Spending too much during the first couple of years of retirement is another downfall of early retirement. Early retirees just do anything without believing that their money will soon become depleted from traveling, purchasing RVs, and taking pricey vacations. Do anything that you really like with the best awareness to comprehend that your retirement are being depleted slowly.

Should you really wish to do those activities, make sure that you save for all those activities in advance and don’t just rely on what you have ended up saving for your entire retirement years. You also have to find a means to replenish the amount you have spent. Don't just rely on your pension plans and social security trust funds as they may not be enough; invest into something.

Assess the cost of living you will likely incur when you retire so you know just how much you need to save. The value of your money has a direct effect from inflation rates which should also be taken into consideration. If the inflation rate is higher than the interest rate you get on your investments, then you will surely have a tough time coping sooner or later.

Getting bored of retirement:

Retiring is fun if you have a lot of things to do. Should you retire, be sure that you have organized activities on your mind. Some would do landscaping work, while some would volunteer within their community. Make sure that you think about activities you will do once you retire to overcome boredom.

To ensure that you enjoy your early retirement, make sure that you're planning early on. Manage your finances well and also have a list of the things you wish to do with your time.