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How to retire early and live well

If you’ve been in work for longer than you can remember and you’re getting a bit tired of the nine to five grind, perhaps it’s time to retire. Finding out how to retire early isn’t difficult, the hard part is putting into place all the financial planning that’s needed to give you enough money to enjoy your well earned retirement.
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Quality of life

The amount you need in your pension is determined by the quality of life you want to lead while you’re in retirement. The amount you have in your retirement fund has to last you for the rest of your life and since the life expectancy for men in the UK is 79 years old and for women it’s 82, you’ll need a lot of cash if you choose to retire early. The sad fact is that your final five to ten years could be full of major surgeries and time in hospital, which you may wish to go private for to reduce your wait for a hospital bed, so you should put aside funds to cover those expenses too.

Financial planning

Not many people are financially secure enough to retire early and those who do often find that they run low on cash so making a retirement budget is the most sensible thing to do. Make it as detailed as possible and be pessimistic about your figures. If you’re optimistic about what you spend, you could be left short of cash. You could use an online retirement calculator like the one found at ageuk.org.uk to figure out your expenses, your current savings and your expected pension income.

Saving

The most obvious way of preparing for retirement is to save money as early as possible. Reducing your expenses is another way of putting more cash into your pocket, so be ruthless about what you’re spending and cut out things you don’t need. Put your money into ISAs and take care to maximise the amount of interest paid on your money.

Diversified portfolio

It goes without saying that savings alone aren’t going to keep you during your retirement, but how should you diversify your portfolio to maximise your income during your twilight years? Putting your hard earned cash into bricks and mortar still makes a lot of sense, but you should also put your money into other forms of equity.

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