Posted By 
By Emily Roberts
For the Financial Independence Hub
Most of us dream about and count down the days until our retirement, picturing ourselves at the beach, enjoying a cocktail while laughing about the days we spent slogging away at the office. These thoughts can be what get some of us through the workday, and even if you love your job and could never picture doing anything else, retirement is still the end goal for all of us so that we can enjoy our later years in peace and tranquillity.
Yet some of us go one step further and think about early retirement. While this may seem like an unachievable dream for many, it can in fact become a reality if executed properly. Retiring at 50 isn’t impossible, but it isn’t easy, either. Typically, people will retire between 65 and 67. This can seem like an age if you dislike your job or simply wish to slow down.
If you are wondering how you could retire early but also the benefits of retiring all together, read the following guide. Not only will it explain the advantages of retirement, but it will also list of the best ways to increase your chances of an early retirement as well as the signs that you may not be ready to retire just yet.
Good reasons to retire
There are many good reasons to retire. For starters, you may be unable to complete your typical day-to-day duties at work as you age. This is especially true for those who work in a physically demanding role such as construction or mining. Your body will be unable to keep up with this labour-intensive work and you are more prone to injuries.
However, retirement is a time for you to slow down and enjoy life. Rather than worrying about getting up and making it to the office in time, you can live your life at your own leisurely pace. While this may seem odd at first, the time you usually spend at work is now yours to do with it as you wish. If you’ve always wanted to focus on your art, then retirement can be the perfect time for you to focus on this hobby and passion of yours. Furthermore, if you have a family, retirement can provide you with the free time to focus on reconnecting with your family (and friends!) and make long-lasting memories with them. This is especially valuable for those who have grandchildren.
Other benefits of retiring include being able to look after your mental and physical well-being. Having a career and being so focused on your job can cause you to forget about what is important: your health. We neglect healthy, balanced meals with those that are quick and typically full of saturated fats. We also lose track of time or are simply too tired to head to the gym even though working out consistently is essential. What’s more, some of us simply need to focus on our mental health more than others and heading to work and working specific hours can be harmful to our mental well-being.
Why Early Retirement can be beneficial
There are numerous benefits associated with retirement; however, there are even more linked to early retirement. For instance, when you retire early, you are able to focus on yourself and the hobbies you have longed to invest time in but was never able to before. With the free time and extra drive you have to spend on your hobbies, you could even consider turning your hobbies into a means of making extra money. For example, if you love to paint or draw, then you could always sell your artwork either online and through a website such as Etsy, or you can make a day of it and sell your work at a local market or yard sale. While you will want to have the mindset of this being a hobby that could potentially bring in some income, this can be a great way to bring you purpose while you’re retired.
The benefits of early retirement are much like the ones associated with retirement in general. However, you simply have more time to achieve any goals outside of your career, spend time with your friends and family, and be able to slow down and enjoy the rest of your life.
Is Early Retirement achievable?
Yes, early retirement is achievable if you have the drive, patience, and self-control to save your money rather than spend it. If you have a high enough salary and the capabilities to put a high percentage of your earnings away, then you could have the possibility of retiring at 40 years old. Of course, you will still want to live your life and earlier years, so be sure to find a harmonious balance between living your life while also saving for retirement.
There are many ways you can make early retirement achievable, however. For instance, you can put away as much of your salary as you want once all your bills are paid for. You can also invest in real estate and live off a passive income. There may also be government schemes for you to put your money into and unlock once you have reached a certain age.
The best way to achieve an early retirement is to have a financial plan in place. With a financial plan, you can foresee how much money you need in order for you to retire but also use it to help pay off your mortgage and increase your savings. With a financial plan, you also have complete transparency when it comes to seeing where your money is going and whether or not you need to make lifestyle changes if you wish to save more.
Invest in an RRSP
A Registered Retirement Savings Plan (also known as RRSP) is a Canadian retirement plan that is a well-known means of saving your money so that you can live your golden years with much less stress and worry. Although an RRSP is not a new retirement plan (it was first introduced in the 1950s), it can still be a difficult topic for people to understand. However, the sole purpose of an RRSP is that it helps Canadians plan and save for retirement so that they do not have so much to worry about.
Still left wondering ‘what is an RRSP’? Wealthsimple has created an in-depth guide and article to help explain what an RRSP is and how it works. Read their article to understand how an RRSP can help you achieve retirement (and potentially an early retirement) as well as its history. Wealthsimple can also help explain the benefits of an RRSP and why you should heavily consider investing in one.
Save and be smart with your money
The best way to achieve an early retirement is to be smart and save your money. While this does not mean you cannot treat yourself to new clothing or a vacation every now and then, you should always put money away first and then live off the rest. You can always change the amount you save. For instance, you may want to only put away 35% of your pay one month and then return to saving 40% of it next month so that you can enjoy yourself or head abroad. Either way, not spending your money frivolously can make a whole world of difference when it comes to retiring at 50 and retiring at 65.
Signs that you are not ready to Retire
Before you retire, you should double check and see how viable of an option it truly is. The last thing you want to do is retire and then in a few years, have to return to work. Below are a few signs that you are not ready to retire quite yet:
1.) You are unable to pay for your current bills
The biggest sign is that you are unable to pay for your current bills. Ideally, you will have paid off your mortgage, but you will also want to check whether you can pay for your utility bills and any other payments such as ones for your car or phone bill.
2.) You still have debt
Do you have debt? You need to pay this off before you retire, otherwise your retirement fund will go into paying it instead, and could leave you unable to pay for your other bills. Being unable to pay off your debts can see debt collectors turning up at your door.
3. ) You lack a financial plan
Not having a financial plan can leave you open to mistakes and overspending. You should create one so that you know how much money you can spend each month and whether that money will last you for the rest of your life.
4. ) The thought of retirement worries you
If retirement worries you, then you may wish to hold off for a few more years so that you can save a little longer. Retirement is meant to be an enjoyable and relaxing time of your life, after all.
Early retirement is achievable, but you will need to save your money and look for ways to enlarge your retirement savings. By doing so, you can enjoy your later years with less stress. Unsure as to whether you are able to retire? You can always speak to a financial expert who could help map you out a financial plan, too.
Emily Roberts is a young writer who is passionate about literature and blog writing.
