Retiring at 50 can be an achievable goal if you take the proper steps. While it’s 10 – 15 years sooner than the ‘typical’ retirement age, you can achieve your goal with careful planning and some sacrifice.

If retiring at 50 is your goal, here are six things to avoid right now.

1.    Waiting to Save

First, if you want to save at 50, you must save now and save big. You shouldn’t just save the minimum amount required. Instead, you must save as much as possible because the earlier you save, the more time the money has to grow, and compounded earnings is the only way to reach your goal.

2.    Not Taking Advantage of Employer Match

If your employer matches your contributions or a portion of them, take advantage – it’s free money! Most employers match the first 1% – 3% of your salary, which could be a significant amount of free contributions depending on how much you make.

3.    Not Rebalancing your Portfolio

While you shouldn’t ‘stalk’ your portfolio, you should keep an eye on it and rebalance it as necessary. For example, if you end up with a heavier portion of your portfolio in bonds versus stocks, you probably won’t reach your goal of retiring at 50. On the other hand, you need a more aggressive portfolio, so keep track of it and rebalance it as necessary.

4.    Not Considering Taxes

Taxes play a significant role in your retirement planning. Not understanding your tax liabilities now could leave you with much less money in retirement than you thought. Work with your investment advisor to have a good balance of taxable and tax-deferred investments while considering how you’ll cover your expenses once you retire.

5.    Taking Social Security Early

Just because you’re retired doesn’t mean you should take Social Security. Instead, your retirement planning should allow you to live on your retirement savings and delay taking Social Security. The earlier you take it, the less you’ll receive each month, which makes it harder to retire early.

6.    Ignoring Healthcare Costs

If you retire early, you must consider your healthcare needs. You’ll likely lose your insurance and won’t be eligible for Medicare yet, so you need coverage and/or savings to cover your healthcare expenses.

Figure out what insurance you’ll have, and the cost before you retire to ensure you have enough saved to cover the expenses, including your deductible.

Final Thoughts

Retiring at 50 is possible with careful planning. Ideally, you’ll start planning in your 20s to allow enough time to save enough to carry you through 30 – 40 years. Retiring at 50 is young and requires enough money to cover the cost of living for much longer, but it also allows you more freedom.

Many people retire at 50 but then continue working part-time doing something they love. It’s like getting the best of both worlds – retiring from your career about still pursuing something you’ve dreamt of all your life.

Finance, Retire