How to plan for an early retirement

in Lifestyle by Neha Kale
(6 Ratings)

For many entrepreneurs on the small business treadmill, early retirement can feel out of reach. Considering your future while running your enterprise is key to transforming your dreams into an achievable reality. If you want to retire in your 50s, it's essential that you take action now. When you're a business owner, early retirement is premised less on staff benefits than it is your ability to steer your own course. Here's our four-point plan for bowing out of the game early while maintaining your quality of life.

1. Fine-tune your goals

If you want to retire early, start by considering your long-term dreams. Would you like to spend time sailing around the world or is it important to maintain your current lifestyle, complete with the occasional small luxury? Write down your five biggest retirement goals and assign a dollar value to each – this can serve as the basis for a retirement budget based on your real-life aspirations rather than your basic needs.

2. Take superannuation seriously

If you're a business owner minus the safety net of an external super fund, it's critical that you take your retirement savings into your own hands. Speak to a financial advisor about arranging a self-managed super plan that lines up with your retirement budget and make sure that you're religious about making contributions. Remember that payments as small as $20 a week can attract government co-contributions that can help you get ahead. For bonus points, accelerating your payments when you experience a windfall is a sure-fire way to put financial uncertainty to rest.

3. Build wealth inside and outside your business

Your entrepreneurial instinct may tell you to reinvest all your profits back into your business, but sometimes putting all your eggs in one basket can delay early retirement and put you on the path to financial ruin. Making a series of considered investments outside your business can insure you against downturns and create income streams to sustain you when you no longer work. Whether it's building a low-risk stock portfolio or purchasing your office premises outright, savvy investments can supercharge your savings goals and ensure that you start your retirement phase on the right track.

4. Brace yourself for a graceful exit

So you've spent thousands of hours building your company and now your personal identity is bound up with your business brand. This type of thinking can create dangerous obstacles when it comes to selling your business and funding your retirement plans. From keeping sparkling records to maintaining your profits, it's critical to operate your business as if you're always on the verge of selling it on. Making your exit strategy a priority in the earliest days of your business can pave the way for a high-value sale bound to reap financial rewards.

If you're passionate about retiring in your 50s, it's important that you put plans in place today. Procrastination is the biggest obstacle to early retirement – your financial future depends on your ability to launch your savings goals without delay.

Have you started paving the way towards early retirement?

This article represents the views of the author only and not those of American Express.

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Neha Kale

Neha Kale is a freelance writer and editor with over six years’ experience in the media and finance industries. She has held senior editorial positions at various business and technology publications and specialises in online strategy, innovation, creativity and management best practices.

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Poll Results

How many hours do you work on your business each week?

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