How To Prepare for an Early Retirement

The best time to prepare for early retirement is now. The earlier you start saving, the better. Here's how to start preparing for an early retirement:

1. Decide on the age you want to retire. Your desired early retirement age will determine how many more earning years you have and how much you need to put away in order to achieve self-sufficiency in your retirement years.
2. Decide what you want to do when you retire. Do you want to sit on the beach drinking piña coladas, grow organic vegetables, travel around the world or take up those hobbies that you never had time for? The amount of money you need to save for early retirement depends on the lifestyle you want to keep.
3. Find out about your Social Security benefits. Inquire with the local Social Security office regarding retirement benefits. Usually, Social Security retirement benefits are not enough to support a lifestyle that requires the same amount of wages as when you are working. They are roughly 40% of income earned prior to retirement. Money from Social Security benefits should be an add on to your would be other sources of early retirement income. While at the Social Security office, ask about disability retirement benefits.
4. Ask about your company's retirement plans. Companies offer different retirement or pension plans. Usually, a fixed percentage is withheld from an employee's pay and placed into a retirement plan every pay period. The employer deposits an equal amount in the same plan. Ask your company what the pension rules are. It will also be good to know if your company or government offers a family pension plan.
5. Review your current finances. This determines exactly how much you can put away. If you have debts, you can either pay for these first or choose a strategy wherein you can pay off your debts while saving for retirement.
6. Open an Individual Retirement Account (IRA). Many financial institutions offer IRAs that allow you to contribute depending on what you can afford. These earn annually and you can withdraw from your IRA when necessary. However, withdrawals will reduce your principal amount and thereby lessen the interest you can potentially earn.
7. Choose your investments wisely. Look for insurance companies offering retirement annuity that will match your means and future needs. Should you look at low-risk investments with average returns? Or high-risk investments that do pay more but wherein you can lose all your investment in a blink of an eye? 
8. Don't touch your savings. Unless it's an emergency, never touch your savings. Pretend your 401Ks are in a vault that can only be accessed when you retire. Once you start dipping into your savings, you'll always find an excuse to continue to do so time and again.
9. Watch your spending. Do you really need the extra set of golf clubs, a fourth car, or frequent trips to the spa? You don't have to live frugally you just have to manage your spending well. Spending wisely gives you more disposable income once you decide to leave the work force early.

If you want to stop working and enjoy the fruits of your labor way before the retirement age, then you should plan for this ASAP. Early retirement is possible as long as you plan for it early and wisely.