Planning An Early Retirement? Beware Of The Risk!
Early retirement often creates a buzz, especially among people who have achieved phenomenal career growth. Is it the right strategy to completely exit the work life at an early age?
Early retirement often creates a buzz, especially among people who have achieved phenomenal career growth. Is it the right strategy to completely exit the work life at an early age?
Early Retirement
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Retirement is a huge decision; it can be financially catastrophic if taken hastily. Usually, most people think 60 is the right retirement age, but it depends on one’s financial obligations, financial readiness, and risk mitigation capacity. The longer the retirement period, the greater the risk mitigation capacity one needs to have to live a comfortable life. Early retirement exposes a person to live longer without work and income flow; thus, it may unfold several risks that they should be aware of. Let’s check out some of the risks you should know before retiring early in your career.
Also Read: Retirement Planning: 5 Financial Mistakes To Avoid For A Secure Future
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Suppose you decided to retire at the age of 35, and at the age of 50 you changed your mind, how will you return to work life? It can be a highly challenging task to return from retirement to your normal work life, especially after you lose touch. You may not be skilled enough to get a job and starting a business would be even more challenging.
So, exiting the work completely should be avoided when you plan to retire early. Try to get yourselves skilled up from time to time even when you are not working.
You may have accumulated a corpus that may seem to the enough for the rest of your life, but what if you want to upgrade your lifestyle in the future? For example, in the future, if you want to buy an expensive gadget, supercar or luxury home, which is not already planned, then your money may not be enough to buy you all these things. If the cost of living increases significantly in the future and beyond your expectations, you may run out of money sooner and it may lead to an end of your retirement life.
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If you set aside a corpus for early retirement and leave your work life, you try to restrict your expenses in sync with the size of your retirement corpus. If you are earning a good income, it can help you consistently upscale your spending capacity and thus you can create a financial cushion that can absorb any size of financial shocks.
When planning an early retirement, you should be careful that you have to leave the work and not leave your skills. Try to stay updated about the market and domain related to your expertise. Always stay connected with the people with whom you have worked, they can be helpful if your retirement goes wrong and you plan to return to work.
The author is an independent financial journalist.
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Retirement planning is crucial for a financially secure future, and avoiding common mistakes is vital. From procrastination to underestimating expenses, here’re at least five retirement planning mistakes to steer clear of. Read on to learn more.
Life is uncertain. It has its ups and downs. While ups make people happy, satisfied, and contended, downs are accompanied by loss, trauma, and financial distress. To sail over the downs, we need an emergency fund
These bonds can be purchased through the designated scheduled commercial bank branches, post offices, and the RBI’s Retail Direct website.
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