Financial Planning, Millennials

5 Ways To Speed Up Your Retirement

Some people enjoy their jobs so much that they will continue to work well into their 60s or later. And others… well they would retire today if they could. If you fall into the latter group, you might want to start to think about how you can hit your retirement date earlier.

Here are 5 strategies to help you move up your retirement date!

1. Increase Your Savings Rate 

Increasing your savings rate is one of the fastest ways to get yourself to retirement. I generally believe that you need to be investing at least 20% for retirement. However, if you can get that number up to 40-50%, retirement will be coming sooner rather than later. 

2. Cut Down Your Annual Spending 

One of the easiest ways to free up more cash flow for retirement planning is to cut spending. We all have fluff in our budget, maybe it’s time you cut it out. It really is an assessment of would you rather retire early or keep your spending where it is at today. There is no right answer to this question, it’s all about what you want. Most who want to retire early would be willing to cut spending to allow that.

3. Decrease your needs in retirement 

A huge part of the retirement calculations is around how much you will spend per year in retirement. The less you need to spend, the less you need to have saved. Just be careful to not set yourself up where you hate retirement because you have such a small amount of money that you cannot do the things you enjoy in life. That would be a miserable retirement. 

4. Start a side hustle 

Any way you can bring in more income, like from a side hustle, is impactful. Especially if you allocate all of these funds to retirement. 

Make more money, save it for retirement, and you will be on your way. A side hustle can increase your savings rate so quickly. Imagine a person making $100,000 and saving 10%. That means they would be saving about $10,000 a year. Now if they add a side hustle that generates $1,000 a month, and they allocate all that $10,000ish per year (post tax) that would double their savings rate! 

5. Redefine Retirement 

For many, retirement is about getting out of that horrible job they have and not working at all. But what if for you, it was about just doing something you love. And what if that job could at least cover your spending. It may not make you anywhere close to what you made before, but if it at least covers your bills so you can let your investments continue to compound, then you could be in great shape. Maybe you just need to redefine retirement to spending time doing things you love. And maybe, one of those things can produce enough of an income! 

Any of these 5 or a combination of these 5 will help get you to retirement quicker if that is your goal!