- Personal Finance
How to be semi retired by the age of 50
When I entered the workforce at the age of 19, I thought I would be able to retire by the time I was 40. As I approached my mid-twenties I realized that I would not be able to retire by age 40, but age 50 was possible. At the age of 30 I had adjusted my retirement goal to age 55. At age 35 I thought 59 1/2 would be a good age to retire. In my mid 40's I figured Social Security would kick in at 62 so that would be a good time to retire. As I approached the age of 50 I finally locked in age 64 1/2 to be the age for me to retire.
Why did I keep pushing back my retirement age? Simple, I did not have a definite plan.
If you want to be semi retired or maybe even retired by the age of 50, you must have a definite plan. There are 3 basic things that you must do to achieve this goal.
1) Get a job. I know it sounds basic but you can not save or invest money if you don't make any money. Obviously the better job you have, the easier it will be to save and invest. However, don't let that fact get you side tracked. Many people today wait for the perfect job. That rarely happens, especially early in your career. Take whatever job you can find and work your way up. Many people have begun their careers sweeping floors and wound up as managers.
2) Stay out of debt! If you are in debt then get out of debt as quickly as possible. This is very important. How can you save or invest money if you are making all kinds of payments? Stay away from credit cards. Save up money and pay cash for a car. Sure you may not be driving a brand new car but you have to keep your goal in mind. When you are 50 years old and able to work only 20 hours per week, you friends will be envious.
If you want to go to college, stay away from Student Loans. Apply for as many scholarships as possible. Look for free grants. Work in the summer and during school. Going to college without a loan can be done. You may not go to Harvard, but a local community college will be just fine.
3) Save and invest your money. While it is wise to invest in a Roth IRA, it won't do you much good if you are going to retire or be semi retired at 50. The reason being that you can not get into your IRA until you are 59 1/2 without being penalized. I suggest investing some into a Roth IRA and also some into regular Mutual Funds. If your goal is to retire at 59 1/2, then I suggest that you throw as much as possible into a Roth IRA, but this article is focusing on the age of 50.
Investing in individual stocks can be risky, so Mutual Funds are your best bet. You should also steer away from very risky investments like Futures. Just do a little research and invest in Mutual Funds that have a good track record and have been around for AT LEAST 10 years. There are many that have been around for 20 or 30 years and even longer. It is fairly easy to find funds that average 10-12% growth. If you invest in those Funds, you will be fine. You should also remember to spread you money out to 4-5 different types of Funds. This will help you maintain a steady growth rate.
One final suggestion on investing. It is a good idea to find a professional to help you. Don't go to just any professional though. Be sure to find someone who is willing to teach you what you are investing in. DO NOT invest in something you do not understand. If they are not willing to talk to you so you understand what you are investing in, then get away from them. Remember it is your money so you should have a know where it is being invested.
Now obviously if you are reading this and are 45 years old, you probably will not be able to be semi retired by age 50. A key ingredient to this success is to start early. The sooner you start, the better. If you follow these 3 basic principals, it will help you retire early or at least retire with dignity.