Are you thinking about what you need to do to retire early? If you are, then your current financial position and the choices regarding retirement location and post-retirement lifestyle will be the deciding factor in the amount of wealth you need to make it happen. Having said that, there is no one single way to arrive at an early retirement. It is the co-working of several processes and decisions that allow you to achieve this goal. In that sense, an early retirement is largely dependent on your ability to identify good investments, develop discipline as an investor, and your capability to follow and review the regimen set out by your financial plan. To help you do that, here are a few tips to keep in mind, if you are thinking about retiring early,

• The sooner you start financial planning the better:
  It should be no surprise that to retire early, you need to start financial planning sooner. It is only then that the true power of compounding can be realised, and a much larger corpus can be amassed. Furthermore, by developing a savings and investment regimen at the start of your career, you will achieve a certain discipline with your finances, which will be instrumental in your plan to retire early.

• Try not to accumulate debt:
  Pay all your bills on time, and don’t allow your EMIs from loans or other forms of debt like credit cards to accumulate. Over time these bills will mount, and apart from deterring your early retirement, they can hinder you from reaching your other goals as well. This also helps you save money when it comes to purchasing your house. By reducing debt and curtailing your credit card use, you can improve your credit score. This, in turn, makes it possible for you to secure a home loan at a lower rate of interest. At the time of retirement, you should have cleared all outstanding debts, so that you can avail the full extent of your income.

• Keep a contingency fund to use for emergencies:
  Things like an accident or a medical emergency cannot be predicted and could seriously affect your goal of an early retirement if you do not make sufficient plans. Keep aside a contingency of liquid funds that can be used in the event of an emergency. This will help you address the matter at hand, and at the same time ensure that your savings and other investments are not badly affected.

• Make smart investments:
  The key to an early retirement is making smart investments, after having a comprehensive understanding of your risk profile over time. Using this, you can develop and review a strategy for asset allocation that mitigates risk by balancing  investments in equity and other assets like bonds, mutual funds, annuities, property, and so on. One more thing to remember is that it is better to take larger risks earlier in your career, when you may not have anyone dependent on you, than later.  

• Work with a professional:
  In today’s world, getting financial advice from a professional has become quite simple and extremely affordable. Working with a certified and experienced financial planner or wealth management firm can ensure that you don’t make any costly mistakes and take the best course of action available to you as an investor, on your journey towards an early retirement.

By remembering these points and working hard towards achieving your goal of an early retirement, you can make it happen. However, once you do manage to retire early, the hard part is in sustaining it. Therefore once you retire, it is advisable to track your spending, devise a new retirement budget, regularly review your financial plan and meet with your financial advisor to see if any improvements can be made.