Your 5 Must-Dos for Early Retirement.
- Kiran S N
- Jun 4
- 3 min read
Updated: Jun 14
"The goal isn’t more money. The goal is living life on your own terms." – Chris Brogan
1. Achieve True Financial Freedom, Not Just Early Retirement
Retiring at 40 or 50 or even 35 isn’t just about quitting your job early; it’s about financial freedom—having enough passive income or savings to cover your basic living expenses without relying on a salary. This means your investments and savings must generate consistent cash flow to sustain your lifestyle. Financial freedom gives you the liberty to pursue your passions, hobbies, or even new business ventures without monetary stress. It’s essential to shift your mindset from “retiring” to “being financially free” for a fulfilling life post-retirement.
2. Calculate Your Realistic Monthly Expenses and Build a Sufficient Retirement Corpus
Start by estimating your basic monthly expenses—groceries, rent, utilities, and essential bills—excluding luxury or extraordinary costs. Factor in inflation (typically around 6% for India) to understand how much these expenses will grow by the time you retire. For example:
If your current monthly expenses are ₹50,000, in 20 years, they could increase to over ₹1.6 lakh due to inflation.
If you need to sustain this expense for 40 years (from 40 to 80), you would require a retirement corpus of ₹6 crore or more, depending on your investment returns.
Include insurance planning. A single hospitalization can cost ₹10–15 lakh for major procedures in urban India. Investing in a robust insurance plan now can save you from eroding your retirement corpus later.
3. Start Saving and Investing Early to Harness the Power of Compounding
The earlier you begin saving and investing, the easier it is to reach your retirement goals. For instance:
If you start at 25 and invest ₹20,000 monthly in an equity mutual fund with 12% annual returns, you’ll accumulate over ₹3.8 crore by age 40.
If you start at 30, you’d need to save ₹40,000 monthly to reach the same goal by 40.
Discipline matters. Consider cutting back on luxury spending, such as dining out frequently or upgrading gadgets annually, and redirect that money into investments.
Additionally, explore geographical arbitrage. If living in a Tier-1 city like Mumbai is expensive, consider relocating to a Tier-2 city or even another country with a lower cost of living, like Vietnam. For example, ₹1 lakh might cover only basic expenses in Mumbai but can provide a comfortable lifestyle in a smaller city or country.
4. Be Realistic and Use Tools to Plan Your Savings and Investments
Use retirement calculators to input your age, expected retirement age, monthly expenses, inflation rate, and expected returns. These tools help you understand how much you need to save monthly and the total corpus required. Be realistic about market volatility and risks—investment returns fluctuate, so diversify your portfolio and have contingency plans. Regularly review and adjust your plan as your life circumstances and market conditions change.
It’s also wise to stress-test your retirement plan by considering worst-case scenarios. For instance, assume a market downturn or unexpected expenses and see if your corpus can sustain these challenges. This provides peace of mind and ensures your plan is robust.
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5. Seek Professional Advice and Align Retirement with Your Life Goals
Consulting a certified investment specialist or financial advisor can provide personalized guidance, portfolio analysis, and strategic adjustments. For example, an advisor might suggest shifting 70% of your portfolio into safer debt instruments closer to your retirement age to reduce risk.
Beyond finances, plan for how you’ll spend your days post-retirement. For example:
If you’ve always wanted to write a novel, block time for writing workshops or retreats.
If traveling excites you, create a travel fund and plan annual trips to destinations you’ve dreamed of.
If you’re interested in giving back, explore volunteering opportunities, such as teaching financial literacy at NGOs or mentoring startups.
Having such plans ensures your retirement is both financially secure and emotionally fulfilling.
Watch the video below for practical tips on achieving financial freedom and retiring early.
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