Early Retirement: Thinking of retiring at 40-50, here's how you can prepare your financial strategy

Early Retirement: Jobs and businesses in the modern world are taxing. One need a lot of dedication and give time to their career to prosper in life. Since people are busy in carving out their success path, they hardly have time to enjoy life and give sufficient time to their family and friends. A lot of people are finding its solution in early retirement between 40 and 50 years of age.

They think in that way, they will have time to live their life to the fullest.

However, they can't afford the luxury of early retirement without financial; freedom early in their life.

However, if one prepare a good financial strategy and start investing money with duly diligence early in their professional career, they can find financial freedom soon.

In this write-up, we will tell how it ispossible.  

Know your retirement corpus

Most experts believe that you should follow the 30X rule regarding the retirement fund, that is, your retirement fund should be at least 30 times of your today's annual expenditure.

For example, if you are 50 years old and your annual expenditure is Rs 9,00,000 (monthly expenditure is Rs 75,000), then according to the 30X rule, you should accumulate a fund of Rs 9,00,000×30= Rs 2,70,00,000.

Start investing early 

Starting early in your professional career makes a lot of difference in retirement corpus at the time retirement.

E.g. If you start investing Rs 10,000 a month at the age of 25 in a mutual fund through SIP at an annualised return of 12 per cent till the retirement age of 50 years, you will get a corpus of Rs 1.9 crore.

But if you delay your investment planning by five years and start investing at 30 under the same investment condition, your retirement corpus will be Rs 99.9 lakh. 

Increase your income

To make a big retirement corpus, you will have to invest aggressively.

In such a situation, you should save 50-70 per cent of your income and invest it in various places.

Although this is easy to say, it is equally difficult to do because in times of inflation, it is difficult for people to save even 50 per cent of their income.

The way to do this is to increase your income. You can increase your income by doing part time job or doing any extra business, etc.

Reduce expenses

Just increasing your income is not enough, to invest big funds, you will also have to limit your expenses.

For this, you have to understand the difference between need and hobby. Try to avoid credit card loans, etc.

If possible, use public transport instead of going everywhere by your car, etc. Apart from this, try whatever way you can to reduce your expenses.

Where to invest

Where to invest is a big question.

To make a huge retirement corpus, you will have to choose such schemes where you get high returns.

Well, in today's time, mutual funds are considered a very good scheme in terms of returns.

Apart from this, there should be many types of options present in your portfolio.

In such a situation, you can take advice from a financial expert.