Factors that Stand in the Way of Early Retirement Plans

Many people wait for retirement, especially if they are stuck at unsatisfactory jobs. Although this may be a good idea, many are unable to do so due to various factors. The most common factor standing in the way of early retirement is lack of savings. Here are a few more.

Excessive Spending

Most us tend to spend more than we earn. This is a fact of life. New cars, new TVs, new golf clubs we cannot afford, all start depreciating in value the moment we bring it home. These are not assets, these are liabilities. Spending money just because we worked hard for it is just not the way to go for early retirement. Instead, start planning for early retirement and stop spending on things you really can’t afford.

Saving too Late

Most of us think retirement is a long way away. What we don’t realize is it is closer than we all think. The best thing you can do to ensure early retirement is to start saving for retirement the moment you start earning. Investing early is the best way of ensuring early retirement.

Insufficient Savings

Those of us who do start saving early, do so in fits and starts. We are not consistent with our savings. Many financial planners advise to save 10% of the salary. But, this does not even come close to the amount you need to have saved by the time retirement knocks on your door. Early retirement requires the saving of much more than 10% of your salary. How do you do this with so much of expenses? You reduce on spending. This doesn’t mean you shouldn’t enjoy life, just be careful with how you spend money.

Large Family

Yes, your family is also an obstacle to early retirement. It takes a significant amount of money to raise a child. Educating them till they are 18 and sending them to college costs a lot. If you have more than one child, this will double your expenses and your early retirement plan will have to be shelved for longer.

It is not easy planning for early retirement. The main thing is to prioritize and get your stuff together. Once you have a plan, and stick to it, early retirement will be within reach.

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