Financial Freedom & Independence - Retire Early
We all put our time in at work to reap the rewards when it comes time to retire. Retirement for most people means not having to work any more, but having the savings or pension to afford our costs of living and expenses and pursue the type of lifestyle we want to but couldn’t during our working years.
Financial independence and the financial freedom that comes with it are frequently associated with retirement. While traditionally, the retirement age has come after decades of work, more and more people want the financial independence typically enjoyed at retirement earlier in life. Or put more simply, they want to retire early.
The opportunity to achieve financial freedom and retire earlier than the norm is well within your reach and it doesn’t have to mean sacrificing your happiness in the present. The expert financial advisers at MyFuture have worked with many individuals to develop achievable plans that they can implement to reach their retirement dreams without having to wait for their pension to mature.
What Is Financial Independence, Retire Early?
Financial Independence, Retire Early, also known as FIRE, is a lifestyle movement that became popular among Millennials in the 2010s to gain financial independence and retire early. It was developed as a model for how young people could achieve their financial freedom without having to put in the time and effort of a lifelong career, while still being able to enjoy a retirement lifestyle, albeit at a much younger age.
How Does The FIRE Movement Work?
The FIRE movement provides a meticulous financial plan for how young people can live, reduce their spending, save money, and invest in order to reach a state of financial freedom and independence at a younger age than the traditional retirement age.
The model of how to achieve this entails strict discipline and what many would consider a spartan lifestyle in order to save and invest the necessary funds that would ultimately enable someone to enjoy an early retirement. The aggressive investments and savings are intended to provide a passive income that would be sufficient for their retirement lifestyle.
While the FIRE principles may be suitable for some, at MyFuture our philosophy is a little bit different. We believe that it’s all very well to create wealth, but you need to be able to enjoy your life along the way.
We strive to develop financial plans that allow clients to achieve an early retirement, without having to make drastic changes to their lifestyles today.
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How Much Do I Need For Financial Independence?
Proponents of the FIRE movement aim to save about 25 times their expected annual expenses and withdraw no more than 4% of their savings on an annual basis which would ideally last as long as they need it to. Much of the available retirement funding for those that ascribe to this lifestyle comes from aggressive savings, occasionally reaching 75% of an individual’s annual salary. While this may seem extreme, depending on a person’s annual salary or seed money, it may be doable without significant lifestyle sacrifices. But for most people, this level of savings is unattainable and, if they do pursue a FIRE strategy, they save at lower rates between 25-50%.
While the FIRE movement is one option for people to pursue in order to achieve financial independence, it is not the only game in town. There are other models that have been popularised over the years that aim to help people reach their financial goals at an earlier age, but the best option for a majority of people is to reach out to a Qualified Financial Adviser who has the knowledge and expertise to navigate the sometimes complex world of finance.
The team at MyFuture can evaluate your financial situation, work with you to identify your individualised goals, and develop a plan that you can implement to help you reach them. Our experienced financial planners understand that your priorities may change over time, but that they aren’t just a fad. That’s why we take the time to listen and make sure you’re happy with the plan to achieve your financial freedom.
How Can I Retire Early?
The key to being able to retire early is to have enough money in savings and passive income to support your lifestyle goals once you stop working. This will differ for everyone depending on the kind of retirement you want and the expected cost on an ongoing basis of your needs, your wants, and any unexpected expenses.
In order to do this, many people have tried different savings and investment models and lifestyle adjustments with varying levels of success.
If you want to have a concrete plan for reaching financial independence and the freedom to retire early, MyFuture is ready and waiting to field your questions and help you get there.
Get in touch today and take advantage of a FREE no obligation Discovery Session where we’ll work with you to protect the present, secure your future, and be prepared for anything life throws at you.