Looking to retire before the traditional retirement age of 65? It’s a big feat and unless you win the lottery, you might find it to be a difficult goal to achieve. The good news: it can be done with some planning in place. Here are five steps to save for early retirement.

1. KNOW YOUR NUMBERS

How much money do you need to retire early? It’s important to know the amount of money you need to live on in retirement, and use that as a basis to determine the amount of retirement savings you’ll need.

2. BOOST YOUR SAVINGS RATE

Many financial planners recommend you start saving 10 to 15 percent of your income for retirement as early as possible. If you’re going to retire early, you might need to save more than 15 percent. It’s essential to start saving early and regularly. By doing so, you’ll increase your compound earnings. If you start saving later in life, you’ll want to bump up your contribution rate to catch up and meet your goals.

3. CUT BACK ON EXPENSES

If you want to retire early and stretch your savings for several decades, you should cut back on expenses. Review your spending and create a costbenefit analysis. Even if you think you’re living frugally, you might find that you aren’t. How often do you dine out or stop for coffee on the way to work? Nonessential expenses add up.

4. ELIMINATE DEBT

It’s ideal to have your mortgage paid off by the time you retire and have any student loans long paid off. Having these expenses paid off will significantly reduce your overall expenses.

5. SAVE AS MUCH AS YOU CAN IN A QUALIFIED RETIREMENT PLAN

If your employer offers a 401(k) or other savings plan, put aside as much money into it as you can. Contributions to your employer’s plan are tax deductible, and earnings from your investments can grow tax-deferred.

Whether retirement is many years or mere months away, chances are the time will fly by faster than you expect. Farm
Bureau can help you with various retirement funding options. We can discuss your options and help you form a plan to achieve your retirement goals. Retirement is the beginning of an exciting chapter in your life. Start saving now and make those years rewarding.