It can be a rude awakening when you work out how far off retirement you are financially. However, with more Malaysians retiring before the age of 60 than any other Southeast Asian nationality, retiring early is very much within your grasp. It simply takes some careful planning, cost-effective lifestyle choices and sensible investments.
Invest wisely
Investing your money can be a very effective way of ensuring that you have a large enough nest egg for a comfortable retirement. Pensions work well in this respect. Given the increasing pressure the aging population of Malaysia is putting on the state pension scheme, it is worth investing in a private pension. Do some thorough research on pensions, and opt for one that offers online usability. This will enable you to monitor your investments closely and give you an indication of your prospective income in retirement.
Overpay on your mortgage
Your mortgage is likely to be your biggest expense on a monthly basis. By overpaying your mortgage each month, or shortening the term of your mortgage, you will increase your chances of being able to live mortgage-free in retirement. This will, in turn, significantly reduce your cost of living, meaning that you can live more comfortably on a day-to-day basis.
Reduce your daily spending habits
A very simple and effective way of saving money is by having a tighter budget for daily spending. Spend time evaluating your lifestyle choices and the expenditures that come with them. For example, consider how much money you spend on vacations. By cutting back on the non-essentials like expensive vacations, costly cars and impromptu shopping trips, you are more likely to be able to save more money. The latter can be put into investment for your retirement fund. Meanwhile, be sure to keep on top of your grocery costs. Plan your meals in advance and shop accordingly, rather than being tempted by things during impromptu trips to the grocery store.
The path to early retirement involves simple steps
Retiring early may seem like a pipe dream to many, but it is in fact far more achievable than you might think. The key is to manage your money sensibly. By doing things such as sticking to a modest but realistic, budget for daily living and making prudent investments with your money, you give yourself the best chance possible of making your dream of an early retirement a reality.