Some people wait for the mandatory retirement age while some hope for an early retirement. My parents worked for 25 years because they want me and my siblings to finish college. They were already in their late fifties. But I had a different plan. When I was still in college, I vowed that I will be working for only a decade in the corporate, retire, and then pursue my passion. Here's how I managed to retire from the corporate after working for only 10 years.
I created a retirement budget plan.
Since I have already determined that I'm retiring in 10 years, I made a reasonable estimate of the expenses I will be incurring and how to sustain my lifestyle. With this knowledge, I was able to know how much I needed to save in 10 years if I will live until I'm 65 years old.
I purchased a health insurance.
We all know that it is very expensive to get sick. As you get older, you are prone to more illnesses. I purchased a 5-year to pay health insurance plan that covers critical illnesses until I'm 100. It gives me peace of mind that my savings will not be depleted if ever I get sick. It is advisable that you get yourself insured while you are still young because it is more affordable.
I allocated my savings.
Knowing how much I need to save makes it easier to be conscious with how I spend my money. Needs are prioritized over wants. I strictly followed the statement INCOME - SAVINGS = EXPENSES. This way, I have a fixed monthly amount of how much goes to my savings.
It is also wise to put your money where you will have the highest yield. Of course, you cannot invest all your money on long-term. Liquidity is very important. Here's how I allocated my savings.
- Regular Savings Account
- Emergency Fund
- Health Fund
- Investments
- Leisure Fund
You can transfer a portion of your regular savings account to a high yield savings or investment. Don't worry if you are not familiar with how the computation works. There are online tools you can use like the https://www.savingscalculator.org. All you have to do is input the figures and the results will be automatically calculated.
I upskilled.
Early retirement does not always mean never having to work. It can be working part-time or simply wanting to try other things. The reason why I retired early from the corporate was because I want to pursue my passion in writing. Upskilling prepared me for opportunities where I can get paid doing what I want while enjoying flexible working hours. Although I am not earning as much as I used to when I was still employed, I am still able to allocate small amounts of my savings.
It feels great to achieve financial freedom at a young age especially if working until the age of 60 is not your thing. Start saving now and make your money work for you so you could choose when you want to retire.