Couple Riding BikesIf you’re reading this, it’s probably too late for you. You will not retire early. No, you will be like the majority of Americans – those average Americans who expect to retire when they’re at the spry age of 66. And there’s nothing wrong with this. After all, you’ve been conditioned to think this way. Your grandparents probably retired in their 60s, and your parents are planning to retire in their 60s, so you (being true to tradition) keep on trucking down the same path, spinning on the hamster wheel called work for decades and decades and decades.

There is, however, a small percentage of people who are pumping the breaks on this age-old system. They’ve learned that, through proper planning, early retirement is in fact an obtainable possibility. Right now, long before their hair has turned gray or fallen out, they’re taking steps to retire early. And because of this, they’ll leave the workforce years before you’re even considering it.

At this point you may be thinking, “Well, those are rare instances – exceptions to the rule. Probably doctors or lawyers or lottery winners.”

And in some cases, you’re right. But those are not the early retirees we’re looking at today. We’re talking about the select few that have kicked the norm to the curb to pursue something better. They’ve looked at the pros and cons of early retirement and decided that it’s right for them. And it’s this attitude that’s causing them to retire in their 50s, or in their 40s or even (for some) in their late 30s.

But not you. No, you’re surely destined to retire at the average age. This is your lot in life. You had better come to terms with it now.

That is, unless you make drastic changes now. If you don’t do that, you will surely retire with the majority. And that’s probably where you want to be. Let’s break down the reasons you’re going to retire in your 60s. This way, you can keep up the good, albeit average, work.

You Didn’t Make a Plan

You’re not going to retire early because you didn’t crunch the numbers. Those early retirees sat down with a calculator and considered the actual cost of retirement. Here’s a painful newsflash: it’s going to be expensive. Some people are shooting for a crisp million (or more) for their retirement nest egg. Go check your account and let that sink in for a bit. It’s essential that these early retirees considered how much of their income should be saved, how much should be invested (we’ll talk about this in a bit) and how those numbers are projected to grow over the years.

So how much are you going to need exactly? It’s going to be different for each person. Some people only need a trailer, a strict bean and cornbread diet and a good dog, while others expect multi-storied houses and convertibles (so their distinguished gray hair can blow in the wind). Some experts will even say you’ll need 70% of your yearly preretirement income and a paid off house to maintain your quality of life. It can be more or less, but having a number in mind will be a good place to start.

Don’t Budge on the Budget

In order to make a plan, you need to know where your money is going. And that comes down to proper budgeting. As it turns out, only 32% of Americans are keeping track of their monthly spending. That’s just depressing, guys. How can you expect to retire early (or at all) if you don’t know what’s happening with your money? By not keeping a budget you’re ensuring that retirement is going to remain far, far away. If you wanted to change this practice, take a look at Mint.com. It’s free, and it offers great suggestions for creating and keeping a budget each month. If that’s not enough, it even has a simple goal-planning tool, which includes options for retirement.

You Didn’t Start Early

You’re not going to retire early because you waited too long. Ideally, you should start planning for retirement in your 20s. If this hasn’t happened, jump on the bandwagon in your 30s. If you wait until your 40s, you’re going to be struggling to retire by your 60s.

I get comments all the time from people – especially young professionals – who say they don’t have any excess money to use for retirement savings. Here’s the thing. Making smart money choices now, even if it means cutting back on your lavish living, will save you hundreds of thousands of dollars in the long run. That mentality starts with the budget. It’s quickly followed by amputating ridiculous financial habits, such as holding credit card debt and having car loans (take a second to learn about the differences between good and bad debt). And once you’ve got this foundation set, look at the money you have available. If it’s not enough to meet your goals, start looking at ways to supplement your income.

You Hid Your Money in the Bank

You’re not going to retire early because you’ve been putting your retirement funds in a checking or savings account. Don’t get me wrong – you need a checking account, and you should have a savings account to keep your emergency fund (which is a good starting point for your budget). But your checking and savings accounts have incredibly low interest rates. You’re not going to see a savings account with an interest rate much higher than 1%. That’s peanuts compared to what early retirees are getting.

Even when you hear about turbulent financial times, investing your money in the stock market is still a financially beneficial option. Let’s quickly consider the power of stock market investments.

On average, you can expect to get a 6-7% annual return on your investment when you invest in the stock market. That may not seem like a lot, but take a look at this example and consider the possibilities.

If you begin saving $500 a month for the next 30 years (considering 7% interest), your total amount saved will look something like this:

Investment image

Let’s break that number down. If you’re investing $500 each month, that means you’ll have contributed $180,000 of your own funds over the course of 30 years. But at the end of that 30 years, you’ll have accrued $600k, meaning you’ll make $429,744.35 in interest alone! That’s right. The interest you walk away with is actually (much) more than the amount you invest.

While we’re on the subject of $600k, one such early retirement guru, known publically as Mr. Money Mustache, refers to $600k as the magic number needed for retirement. Take a look at this article that sums up his family’s retirement strategy. Oh, I should mention that he retired at the ripe age of 30, so you should take his work seriously.

When it comes to investments, the power is in the interest. And when it comes to interest, the power is in the time. The longer you invest, the more your retirement funds are going to grow.

Investment Properties

Young retirees are often skilled in the art of investment properties. This means that they’re buying up real estate and then renting it out to tenants. This is a great option for the investor who wants to have a more hands-on investment experience. Think you have what it takes to be a landlord? You should first consider the responsibilities that come with the job.

Get Rolling

There’s nothing wrong with retiring with the rest of the pack. I won’t hold it against you. After all, choosing early retirement is not for the faint of heart. It’s going to take ingenuity, self-control and long-term planning skills. But if you decide to make the changes now – if you decide to get your spending under control and bump up your savings, you are sure to get to retirement long before your golden years begin.

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