4 Tips to help you Retire at 40

4 Tips to help you Retire at 40

Retirement seems far away when you are in your 20s and 30s. Isn't it something reserved for the oldies? Think deeper. Do you want to free up more time for yourself and your loved ones, or for a hobby or a passion? Do you wish you could escape the 9 to 5 life every working day? Have you been putting off your dreams of traveling the world, or doing philanthropy and social work, or pursuing artistic interests to after retirement? Is your life all about climbing up the mountain of EMI’s, bills and daily expenses? Do you want to retire by 40?

With a little planning and foresight though, it is possible to opt out of the workforce early and get down to doing what is important to you. Here are 4 tips to spur you on towards retiring at 40.

1. Devil in the Details

Get as specific as you can when you are planning for an early retired life. List out all your expenses as of today, and add the ones that are going to show up as time passes. List out how much time you have to get to your retirement goal. If you have plans to trek across the world or set up an NGO or take up an expensive hobby, factor in what it will cost you. Similarly, list out all big ticket expenses that await you like education for the kids, your contribution to wedding budgets, etc. For most people, a corpus that is 20-25 times your present annual income is a good starting point.

2. Getting Numbers Right

You might be clear about how much money you need to get by once you retire, but hidden expenses like taxes and inflation also need to be budgeted for. Include property tax, wealth tax, gift tax, etc, which you might need to pay on an ongoing basis. Review your retirement plan and portfolio at least once a year if not more often and course-correct as required. Personal finance apps like Money View can help you easily figure out where your money goes, and what portion of it can be diverted to retirement savings.

3. Older Is Wiser

What you planned for life when you were 20 might not hold true when you are 40. This applies to interests, dreams and goals as well. You might want to revisit your goals, your abilities, your timeline, and even the practicality of what you are thinking. Use the wisdom of your years to make changes to your lifestyle and behavior to adapt to the retiree budget. Expensive gifting, extensive travel, hosting social do’s, etc., can easily be moved to the not important, not urgent list till you have spare funds. You can also consider gradually reducing the hours you work and finding more time to pursue your passion instead of looking at a full retirement from work.

4. Health Is Wealth

The other side of the midlife mountain is, how do we say it, downhill. Buy medical insurance for yourself and your loved ones to cover all possibilities. Start taking better care of yourself and your loved ones right away. Each day you delay health measures like routine screening and checkups, dentist visits, quitting smoking, etc., adds to your future expenses. Every little thing you do today to take care of yourself and your loved ones is a big investment that will show up as reduced healthcare costs as you age gracefully.

With these 4 pointers, you are already on the road to retiire at 40. All you dream of is waiting patiently. The time to start is now.

Subhorup Dasgupta is a Hyderabad-based writer and artist. He writes about responsible living at his blog,  Subho's Jejune Diet