Imagine a life free from the constraints of a nine-to-five job, where you can explore the world at your own pace and indulge in vibrant cultures, breathtaking landscapes, and unforgettable experiences. That could be your life if you take the steps required to retire as early as possible.
Retiring early and embarking on a life of full-time travel offers countless benefits, such as personal growth, flexibility, and exposure to engaging in enriching learning opportunities.
By embracing a mindset focused on financial independence and careful planning, you have the power to turn this dream into reality. Read on to discover practical advice that will set you on the path toward an exhilarating journey through distant lands and liberating retirement experiences.
5 Questions to Ask Before Considering Traveling Permanently
Traveling permanently, despite how much it sounds like a vacation, isn’t for the faint of heart. You need to really understand yourself and your personality before you buckle down to retire early.
Do You Love to Travel or Just Take Vacations?
Ask yourself if you truly enjoy exploring new places full-time or simply like the idea of an occasional vacation. This distinction is important because traveling permanently demands dedication, adaptability, and persistence. It also requires a lot of prior planning to get right.
Do You Have Important Obligations at Home?
Before embarking on your journey to travel, you need to consider any obligations you may have at home. For example, family responsibilities, pets, or careers could be factors in determining whether this lifestyle would be a good fit for you. These obligations may continue in retirement.
Are You in Good Health?
Traveling requires physical and mental stamina. Therefore, if we consider the long-term nature of constant gallivanting around the world, your mental and physical health is of utmost importance. If you’re currently too ill to be away from a doctor for long, don’t consider taking this route.
Can You Afford to Travel Permanently?
Finances are always an essential aspect when planning a life of full-time exploring. To avoid putting undue stress on yourself during your travels, make sure that you have a solid financial plan in place beforehand. Consider multiple avenues for income generation while on the move.
Are You Willing to Make Sacrifices to Travel Eventually?
Traveling permanently might require you to make some sacrifices, such as giving up a stable job or leaving friends and family behind. You may also have to live frugally by saving every dollar you earn. It could also mean pouring money into investments and sitting on them for a few years.
7 Ways to Achieve Early Retirement and Travel Full-Time
While these 7 ways can definitely help you achieve early retirement, you should try to include all of these options in the planning process. Used in tandem, you’ll reach your goals much faster.
Contribute to Your Workplace Retirement Plan
Maximizing your contributions to your employer’s retirement plan, such as a 401(k) or pension scheme, is crucial for ensuring a comfortable early retirement. Make the most of any matching contributions offered by your employer to build up your savings while you’re still working.
With that said, make sure you don’t withdraw from your retirement accounts early. The IRS charges a 10% penalty for withdrawals (if they aren’t considered penalty-free) before age 59½.
Avoid Debt and Start Paying Off Debt
Debt can significantly hinder your ability to retire early and travel full-time. Therefore, try to pay off any outstanding debts as quickly as possible and avoid accruing new ones. It’s absolutely vital that you put any extra money towards your debt before you distribute it amongst savings.
Invest Early and Often
Investing in stocks, bonds, or real estate can provide long-term growth that boosts your overall retirement savings. Begin investing sooner rather than later so you can reap the benefits of compound interest over time. Keep in mind that investments incorporate a bunch of things.
For example, investing in a good electrical bicycle can save you money on repairs down the line, so if you want to ride one during your travel, get a top-of-the-line model 2 years before retirement.
Take Advantage of Employer Stock Plans
Employer stock plans offer another opportunity for investment growth with potential employee discounts on shares or additional benefits like dividends or capital gains. Participating in these plans, if your employer offers them, can contribute to your overall retirement portfolio overall.
Consider Getting a Health Savings Account for Health Expenses
A Health Savings Account (HSA) can be an excellent way to save for future medical expenses while also receiving tax benefits. These funds grow tax-free and can be used tax-free for qualified medical expenses once you reach age 65—a great safety net once you’re much older.
Remember that this type of spending can benefit your travels when you’re much older. With the extra money you’ll save after 65, you can splurge on a cool RV or stay in fancier hotels.
Set Up Multiple Sources of Income
Relying on a single source of income may not be enough to support your early retirement goals. Diversify your earnings by setting up multiple streams, such as rental properties, side businesses, or passion projects, which can generate passive income while you’re traveling.
Think About Working While Traveling
While working while traveling doesn’t technically qualify as retirement, some people will still have to work in many scenarios. That doesn’t mean you can’t semi-retire. There are plenty of jobs that allow you to travel, and when that fails, you can take a freelance gig that supports your travels.
But if you’re just interested in saving some money, not fully working, consider swapping houses with another expat, house-sitting, or volunteering. If anything, you’ll save on room and board.
Now that you’re armed with valuable insights and strategies, it’s time to embark on your own journey toward early retirement and a life filled with adventure. Don’t let your dreams of exploring the wonders of the world remain a distant fantasy, as you may lead a life of regrets.
Take actionable steps today to secure your financial future, prepare yourself for the exciting challenges ahead, and embrace the freedom that comes with traveling on your own terms.