Do you want to retire early? This is a wonderful goal for many Americans, but it also requires thought about what you want to do with your time. How will you fill your days as an early retiree? The answer impacts how you need to plan for financing these pursuits. To help you make the changes now that will facilitate the retirement plans you seek, here are five ways to tailor your wealth management plan.
1. Start a Business
Whether you want to continue as a consultant in your field or start a completely new business, doing so will have both positive and negative financial effects. You may need to save more for the early stages of your business when it doesn't turn a profit, for instance. But a successful side business can mean you will take less from your retirement plans, which gives you more flexibility.
2. Go Back to School
Want to finally get that degree? You'll need to plan how to pay for it. How much to save for this goal depends on the degree goal and schooling you plan to get. You may also want to research any financial aid options that can be used to contribute toward tuition and other expenses. And don't overlook tax-advantaged education accounts that can pay for school while saving tax money.
3. Travel the World
Many early retirees want to use their free time to travel extensively. If this is your plan, boost retirement savings to account for the extra expenses of travel in whatever style you prefer. Keep in mind that you will also likely need to pay for the maintenance of your permanent home at the same time. Some who want to travel later in life create a targeted investment account just for this purpose.
4. Spend Time With Family
If more family time is one reason you want to exit your career early, you may or may not need to put aside more money. But the importance of your family means you should ensure that your estate planning is done. You may also want to spend more on your kids and grandkids, including funding their education, helping them buy a home, or investing in their entrepreneurial ventures.
5. Move Elsewhere
Anyone planning to move to a different location when they retire should research the costs of their intended location. If you move from a city to a rural area, you will likely need much less for a comfortable retirement. But if you plan to upgrade your home, move overseas, buy a second home, or become a snowbird, you may see additional costs and need to plan better financially.
The best way to ensure your early retirement goals are met is to discuss them with your financial planner. A good wealth management service will assess your plans, target your financial goals, explore alternative investment strategies, and adjust accordingly. Make an appointment today to get started with wealth management planning.