6 Factors To Keep In Mind For Early Retirement

Retirement planning requires time and effort. A good plan and following it through are keys to a peaceful retirement. Read on to know what else to keep in mind

Versha Jain
July 19, 2023
6 Factors To Keep In Mind For Early Retirement

Retirement does not come to those who do not plan. It demands proper planning, discipline, and constant review of the plan if you want to retire without worrying about making ends meet. Sounds good, right? But to stop working for money and start using your time on something you always wanted to do but did not get time for requires meticulous planning and regular review of your finances. 


Pradeep Suryavanshi, founder and CEO of Bestmate Investment Services Pvt. Ltd. says, “Retiring early is an attractive goal for many individuals who want to enjoy financial freedom and have more time for personal pursuits. However, it requires careful planning and consideration of various factors to ensure a comfortable and sustainable retirement.”

Here are six key points to remember if you want to retire early.

Plan Early And Develop Different Income Sources: 

Start saving early if you want to retire early—the most important benefit of starting early is the ‘compounding’. So, for early retirement, one should start saving and investing from the early years of earning so that the income can grow multifold with the power of compounding.

Additionally, one can work on increasing the income or develop diversified income sources; for example, rental income, investment, etc. It will provide extra income and the security of not depending on only one income. Thus, having a plan early on will help set a realistic goal for early retirement. 

Determine The Retirement Corpus Size:  

“Create a detailed budget to understand your expenses and lifestyle need during retirement and plan accordingly”, says Suryavanshi. Determine the financial corpus you would need after retirement. Knowing how much funds you would require after you stop working is essential. To find the corpus size needed, you must know your expenses, lifestyle, and family responsibilities after retirement. Besides, one should consider the current income and inflation to reach a viable retirement corpus size. Getting to this figure is complex, and one may seek help from advisors. It is critical to understand because, based on the required corpus amount, one can plan to earn more and have more savings and investments. 

Save More And Invest More: 

Where early planning is crucial, sticking to it is even more critical to achieving the retirement goal early. When the planning is in place, you will need savings and investment discipline. Achieving early retirement would remain a distant dream without adequate savings and investments. You will need more savings to retire early, unlike a delayed retirement, where one puts in more years to earn money and build savings before they can be used. Hence, choose suitable investment instruments that complement your retirement plan and offer good returns. Early retirement also means investing more in a short period and spending less.

Reduce Debts: 

Spending less or spending judiciously during the working years also includes handling debts. Debt may be required sometimes, but timely repayment should not be ignored because if you stretch it out, debts may mean more income outflow and delayed retirement.

Health Insurance: 

Health aspects cannot be ignored while planning for retirement at 60 or earlier. During working years or after retirement, health-related expenses should always be considered. You may buy a health insurance policy that covers pre-existing and critical illnesses, discounted premiums, etc. Furthermore, one may have a family floater plan with sufficient insurance coverage to ensure no health expense-related hassles after retirement. Adds Suryavanshi, “Consider your family’s history of longevity and your health to estimate how long your retirement savings may need to last.”

Plan For An Emergency: 

The last point is setting aside some funds for emergencies. Any unexpected incident can bring retirement planning off-track. So an emergency fund should be kept aside to meet life exigencies. While planning for early retirement, ensure you have saved enough to fulfil your responsibilities and enjoy retirement with a reasonable lifestyle. Retirement is peaceful when you do not have to worry about money. It is all about making the right financial plan to generate a sustainable, regular income for life. 

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