Early Retirement

If you're like most people, you're grateful for your job and generally enjoy it, but you can't wait for weekends and vacations.

Taking it to the next level, you also can't wait to retire - and may even be planning on an early retirement. If you are, then you need to invest your money wisely so you can live comfortably and securely once you leave the workforce. There are some sound, tried-and-true tips that you should follow when investing for early retirement.

Many tips on investing for early retirement really boil down to common sense.

• Don't live beyond your means. In essence, spend less than you make - the less the better - and put that unspent money into your savings and investments, such as 401ks, CDs, mutual funds and IRAs.
• Avoid debt. The best and easiest way to do this is to put your credit cards somewhere that you can't get to them easily, and use them only for emergencies. Accruing credit card debt is a major problem for many people, and one that can spiral out of control, especially if you abuse a credit card with high interest rates. "Good" debt, like a low-rate mortgage loan or other value-oriented long term investment, is different from the debt of pure consumption of goods and services - even if you're buying them with a low-rate credit card.
• Start saving and planning early for your early retirement. The sooner the better, in fact. If you begin the process of saving and investing for an early retirement in your 20s, you're going to have that much more money than if you start in your 30s or 40s. Again, pure common sense dictates that plans for early retirement will have a greater chance of success if they're implemented as early as possible.
• Think about tax-deferred retirement plans. These kinds of plans take the money out of your paycheck and put it into your 401k or IRA before you actually get paid, so the hard task of parting with your money is done for you, before you even get your check.

Are you thinking about taking an early retirement? If so, you're not alone. Many people want to "jump ship" from the daily grind and really live life while they're younger than 65. Of course, retiring early means you have to have plenty of money saved up in order to do it comfortably - life costs a lot of money no matter how old you are. In fact, it might cost more on average when you're older because you need more help with things. One way that many people plan for early retirement is through the very popular savings vehicle of a Roth IRA. Like the regular IRA and the 401k, the Roth IRA was created specifically for retirement savings.

With a Roth IRA, you can access the amount of money you've contributed to it at any time. So if, for example, you've been putting in $1,000 per month, you can access the total of your contributions at any age. Since a Roth IRA is an investment fund, the money you put into it should grow as the money is invested.

When it comes to accessing the earnings of your Roth IRA, however, that's a different story: You have to wait five years from the year in which you opened your account. You must also meet one of the following qualifications:

• Be 59.5 years or older.
• The withdrawal is for your beneficiary after you die.
• You have become disabled.
• You need the money for higher education costs and student loans won't cover it all.
• You have medical expenses which aren't covered by your health insurance.
• You are a first-time home buyer and need it for a down payment: the bigger the down, the better your mortgage rate.
• You plan on making substantially equal payments (SEPP).

Roth IRA accounts are flexible investment vehicles and make for a very smart complement to your early retirement dreams. Before you definitively retire early, consult with a financial advisor to make sure you are making the right decisions.

Practically everyone has to work for a living, and earn their way in the world. If they don't, they're one of the lucky few who inherit tons of money from their parents or grandparents, or win the lottery and are set for life.

For those of us who work, it can seem like endless dreariness, and ...