Retiring early can be difficult. But asking an artificial intelligence (AI) for some tips could help. While understanding the steps for early retirement is simple, following through takes time, planning and discipline.
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So if you want to retire early, start now and consider these tips to avoid working until your 60s.
Make a Retirement Plan
The first step toward retirement is planning for it. Unless you have a substantial amount of money already saved, you can’t wake up one day and decide to retire. You need to plan for it and make decisions beforehand.
- What age do you want to retire by? What is considered “early retirement” may differ depending on the individual. Is it in your 30s, 40s or 50s?
- What’s your desired retirement lifestyle like? Where will you live, and how much will you spend? Answering these questions will help determine how much you’ll expect to spend during retirement.
- How much do you need to retire? If you’re going to live on a fixed income, you need to make sure you have enough money saved to maintain your retirement lifestyle. A rule of thumb that works for some people is to save 25 times your annual retirement spending.
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Start Saving and Investing Early
If you plan to retire young, you’ll need to start saving and investing early to take advantage of the time value of money. It’s a smart idea to utilize tax-advantaged retirement savings accounts, like 401(k)s, 403(b)s or individual retirement accounts (IRAs).
Beyond these accounts, you can also use brokerage accounts to invest in the stock market and mutual funds, and high-yield savings accounts for better-than-average interest rates.
Curb Spending
One easy way to increase the money you have for retirement is to decrease the amount you spend. If you cut back on frivolous spending, you’ll be that much closer to reaching your retirement savings goal. Here are a few easy tricks to spend less.
- Avoid lifestyle creep: Just because you make more doesn’t mean you need to start spending more. By maintaining your current lifestyle as you earn more money, you’ll be able to save for the future.
- Make small lifestyle changes: Instead of eating out or buying coffee every day, cook your dinner at home and brew your own coffee. Small changes like these may not seem significant now, but they can add up in the long run.
- Practice mindful spending: Don’t buy things just because you can afford them. Focus on making your purchases last, and when it’s time to replace something, look for sales or secondhand options before paying full price.
Earn More Money
The more money you earn, the more you can save and the quicker you can retire. Try increasing the amount of income you have coming in by considering these options:
- Asking for raises
- Starting a side hustle
- Finding passive income streams, like operating a rental property.
AI may have some answers for retiring early, but turning that goal into reality requires planning and effort, so get a jump start on it now.
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This article originally appeared on GOBankingRates.com: I Asked ChatGPT To Explain How To Retire Early — Here’s What It Said
