Förtidspensionering har blivit ett populärt ekonomiskt mål. Och det borde det väl vara.
Även om du aldrig går i pension i förtid är det befriande att bara veta att du kan!
Och det kanske bara är strategin som frigör dig för att ta dig an ännu större utmaningar i livet.
Det kan hända när du når den punkt där du inte längre har att arbeta för sitt uppehälle.
Det finns alla olika åldrar som folk vill gå i pension vid, och för de flesta är det förmodligen något i stil med så snart som möjligt! Men låt oss fokusera på hur man går i pension vid 50 eftersom det är ett genomförbart mål för många människor.
Hur kan du få det att hända?
Om du är 25 just nu bör du börja spara för att gå i pension vid 50 nu – som omedelbart. Det bästa sättet att bevisa poängen är med ett par exempel.
Om du bestämmer dig för att skjuta upp sparandet för att gå i pension vid 50 i ytterligare fem år – när du är 30 – och du börjar spara 10 000 USD per år, investerat med en genomsnittlig årlig avkastning på 7 %, så när du är 50 kommer att ha 425 341 $.
Men om du istället bestämmer dig för att börja spara redan nu – igen, 10 000 USD per år, investerat med en genomsnittlig årlig ränta på 7 % – så kommer du att ha sparat 656 227 USD när du är 50.
Det är en skillnad på mer än $230 000, bara för att börja spara och investera fem år tidigare.
Det är en vanlig uppfattning att du kan gå i pension bara genom att spara 10% eller 15% av din årsinkomst. Och det kan vara sant, om du planerar att gå i pension vid 55 eller till och med 60, och har 35 eller 40 år på dig att spara och investera pengar.
Men om du menar allvar med att gå i pension vid 50, kommer du att behöva spara mer än någon annan. Det kan innebära att du sparar 20% av din inkomst, eller kanske 25% eller till och med 30%. Heck, om du är mycket äldre än 25 eller 30, måste du spara mellan 40 % och 50 % av din inkomst om du hoppas kunna gå i pension vid 50.
Men varje gång du får en löneförhöjning eller befordran med en ännu större löneförhöjning, istället för att spendera de extra pengarna, satsa på besparingar. Efter några år av stadiga löneökningar bör du kunna öka din sparränta till 30 % eller ännu mer.
Att spara en så stor andel av din inkomst uppnår två mycket viktiga mål:
Den andra punkten kommer att vara väldigt viktig när du faktiskt går i pension. Ju mindre pengar du behöver för att leva på, desto snabbare och mer effektivt kommer du att kunna gå i pension.
Jag behöver förmodligen inte berätta att du inte kommer att kunna gå i pension vid 50 genom att investera i räntebärande tillgångar, som depositionsbevis. Räntor på 1 % per år eller mindre kommer bara inte att sänka det.
Du måste investera i aktier, och det är där den stora majoriteten av dina pengar kommer att behöva investeras hela tiden. Aktiemarknaden har i genomsnitt avkastat mellan 9 % och 11 % under de senaste 90 åren och det är den typen av tillväxt som du måste utnyttja om du vill gå i pension vid 50.
Annonser efter pengar. Vi kan få kompensation om du klickar på den här annonsen.Annons
Livet är oförutsägbart. Din pensionsplan borde inte vara det. Ta kontakt med en oberoende finansiell expert för att se om du är på väg att nå dina pensionsmål. Klicka på ditt tillstånd för att komma igång. Get Started Since you’re probably well under 50 now, you can afford to keep 80% to 90% of your savings invested in stocks. That’s the best way to get the kind of return on your investments that you’ll need to build the kind of portfolio you’ll need to make early retirement a reality.
All the rewards of aggressive investing come with some risk, so you want to make sure you invest with a solid platform. Here are my top picks for all of you bold investors itching for early retirement:
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M1 Finance: Rather than assessing risk tolerance, M1 focuses on helping you target your investment goals and stay on track to reaching them. When you invest with M1 Finance, you can choose from 60 expertly designed investment “pies” made of up to 60 ETFs and stocks, or create your own. M1 then manages your investments, rebalancing your account as needed. M1 gives you fee-free account management and trades, and requires low initial investments, making it a great choice for aggressively investing for early retirement.
Taxes are one of the under-estimated obstacles of early retirement planning. Not only do they reduce the income you have available for savings, but they also take a chunk out of your investment returns.
For example, if you earn 10% on your investments, but you’re in the 30% tax bracket, your net return is only 7%. That will slow your capital accumulation.
But there is a way around that problem, at least partially. You should maximize your tax-sheltered retirement contributions.
Not only will that reduce your taxable income from your job, but it will also shelter the investment earnings in your investment portfolio so that a 10% return will actually be a 10% return.
If your employer offers a 401(k) plan, you should make the maximum contribution you’re allowed to. That would be up to $18,000 per year. If your employer offers a matching contribution, that’s even better.
You should also plan to make contributions to a traditional IRA, even if those contributions won’t be tax deductible due to income limitations. The investment earnings in the account will still accumulate on a tax-deferred basis, and that’s what you want to happen.
Now there is a basic problem with retirement savings, at least in regard to early retirement. If you begin taking withdrawals from your retirement accounts before you reach age 59 ½ you will not only be subject to income taxes on the withdrawals but also the 10% early withdrawal penalty as well.
But there’s a way around that dilemma – it’s the Roth IRA.
You don’t have to contribute to a Roth IRA every year in order to get the benefits of the Roth IRA. You can set it up by doing a Roth conversion from other retirement accounts, such as a 401(k) plan and a traditional IRA. (That’s another big reason why you should always max-out your retirement savings, especially if you want to retire at 50).
Roth IRAs enable you to take tax-free withdrawals from the plan once you reach age 59 ½, and have been in the plan for at least five years.
Roth IRAs have a loophole. Contributions to a Roth can be withdrawn free from taxes and the early withdrawal penalty.
After all, since there were no tax savings going in, there’s no tax liability going out. (Taxes and penalties, however, do apply to the earnings from the account, however, the contribution withdrawal rules don’t require a pro-ration between contributions and earnings the way traditional IRA withdrawals do.)
That contribution withdrawal loophole makes the Roth IRA perfect for early retirement. You can make this happen by doing a series of annual Roth IRA conversions from your other retirement accounts.
Are you with me so far?
There is one difference between contribution withdrawals from a regular Roth IRA and a Roth conversion. Since you are not making direct contributions with a Roth conversions, but rather converting balances from other accounts, the IRS has a five-year rule on early withdrawals.
At least five years must pass between the time a balance is converted and it’s withdrawn from the account . If it’s withdrawn sooner, it’s still not subject to ordinary income tax, but it will be subject to the 10% early withdrawal penalty.
You can avoid this by making a series of annual conversions to a Roth IRA, in what is known as a Roth conversion ladder.
Basically, what you do is decide how much money you will need to live on when you retire, and then convert that amount each year for five years.
As long as you stay five years ahead, you will always have a sufficient amount of Roth funds to live on, and you can withdraw them free of both income taxes and penalties.
EXAMPLE: Let’s assume that you need $40,000 per year in order to live on in retirement at age 50. You have several hundred thousand dollars in your 401(k) plan, so five years from now (in 2022), beginning at age 45 you start making annual conversions to your Roth IRA of $40,000. Once you turn 50 (in 2027), you can begin taking those withdrawals from the Roth IRA each year, free from taxes and penalties.
To illustrate, your Roth conversion ladder will look like this:)
| Year | Age | Amount of Roth Conversion | Amount of Roth Withdrawal | Source of Funds Withdrawn |
| 2022 | 39 | 40,000 | 0 | N/A |
| 2023 | 40 | 40,000 | 0 | N/A |
| 2024 | 41 | 40,000 | 0 | N/A |
| 2025 | 42 | 40,000 | 0 | N/A |
| 2026 | 43 | 40,000 | 0 | N/A |
| 2027 | 44 | 40,000 | 40,000 | 2022 Conversion |
| 2028 | 45 | 40,000 | 40,000 | 2023 Conversion |
| 2029 | 46 | 40,000 | 40,000 | 2024 Conversion |
| 2030 | 47 | 40,000 | 40,000 | 2025 Conversion |
| 2031 | 48 | 40,000 | 40,000 | 2026 Conversion |
The Roth conversion ladder will enable you to make early withdrawals from your Roth account until you are 59 ½ and can begin making penalty-free withdrawals for your non-Roth retirement accounts. It will also prevent you from having to draw down non-retirement accounts.
There is one downside to the Roth conversion ladder, which is a problem with all forms of Roth conversions, and that’s that you will have to pay regular income tax on the number of retirement assets converted to a Roth IRA.
But that may be a price worth paying if it means you’ll be able to have a generous early retirement income to go with that early retirement.
One financial habit you’ll have to get into is to live beneath your means. That means that if you earn a dollar after taxes, you’ll have to live on say, 70 cents, and bank the rest.
That’s not an easy pattern to get into if you’ve never done it before, but it’s absolutely necessary. Unless you can master it then early retirement will be nothing more than a pipe dream.
In order to live beneath your means you’ll have to adopt a few strategies:
Any money that isn’t going into living expenses is more money for savings.
A word of warning about debt:it can undo everything you’re trying to accomplish in order to retire at 50. It will do you little good if you reach 50 and have $500,000 saved, but $100,000 in debt of various types (it’s easier to get to that level than you think – just live the TV version of the suburban lifestyle and it’ll happen all by itself!).
Not only does debt weaken your net worth, but it also comes with monthly payments. And you’ll need as few of those as possible if you’re going to retire at 50. Better yet, the goal should be to be debt-free entirely. Debt not only raises the cost of living in retirement, but it will reduce the amount of income you’ll have to dedicate to savings between now and then.
Being debt-free should include your mortgage if you own your own home or plan to. Your early retirement plan should include a sub-plan to pay off your mortgage in time for your retirement date.
As you can see, if you really want to retire at 50 you’ll have to adopt a multi-strategy plan to make it happen. It’s mostly about saving a lot of money and investing it well, but there are a lot of factors that will make that challenge more doable.
Make a plan now, and then stick to it religiously, and you’ll be able to retire at 50 – or any other age you choose.
