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If you could have one Christmas wish would it be to retire 5 years early?

Honestly, who doesn’t want to retire early? But how many of us had a 2023 that made us think that was in the cards?

Likely, not that many of us. With Christmas right around the corner, an early retirement is unlikely to be under your tree. At the same time, there’s also a new year approaching…and a new chance to get closer to that goal.

How To Make Your Christmas Wish a Reality

So, how can you increase your chance of retiring early? You don’t get your state pension until a certain age, so any years before that, you have to fund yourself. If you want to retire at 60, you’re likely looking at having enough money saved to live on for five or six years. Employer pensions can, of course, become available earlier.

So, here are some tips to put in your stocking:

  1. Know how much money you will need. Add up any pensions you have accumulated then look at the difference between that and what you need to sustain a lifestyle you will enjoy. There are no hard and fast numbers, because it depends on what’s important to you and your likely lifespan based on your health and family history. If you plan on traveling a lot you will need more than if your goal is to stay home and potter.
  2. Focus on wiping out your debt, including your mortgage. Being debt free is key to a happy and stress-free retirement. Avoid taking on loans as much as possible; only do so when you need the thing (such as a new car if you live somewhere you have to drive for work) before you can save for it. Paying interest increases your costs. Then when you have paid off the debt, redirect the payment to savings.
  3. Look for ways to cut expenses. Don’t cut yourself to the point where you are miserable, but many people who retire early aim to live on about 50% of their income.
  4. Invest carefully. It’s best to get a financial advisor to help you get your money working harder for you.
  5. Consider a side hustle to increase your income although, again, you don’t want to make yourself miserable working all the time.
  6. Have a plan. Some people retire and then go back to work because they don’t know what to do with themselves. Don’t let that be you! Ask yourself why you want to retire early and what you are going to do with your time?

Our completely free scorecard will help you determine what you still need to do to achieve the goal of retiring early. It will give you valuable and personalised insights as well as a benchmark of how you are doing.

Planning for the New Year

Once you have your scorecard, decide what you want to do for the next year to get yourself on the right path. Even if you’re the kind of person who’s New Year’s resolutions are forgotten by January 15.

Schedule a meeting with a financial planner to help you get even more personalised insights. Then make at least one small change that will get you closer to your goal. It might be cycling or walking, not driving, to the corner store. It might be choosing a cheaper staycation at Brighton over that dream trip to Greece…or saying you will take the trip to Greece but count it as two or three years’ major holiday time.

FH Manning can help you enjoy your twilight years in the way you want, rather than the way your budget dictates. Use our free scorecard then, if you want more insights, email Claire at clm@fhmanning.co.uk to discuss your results and what your next steps should be. And Merry Christmas!

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