Want To Retire Before 50? A Mindset Shift Can Make All the Difference
Rob Berger is the author of “Retire Before Mom and Dad: The Simple Numbers Behind a Lifetime of Financial Freedom” and the founder of the site Dough Roller, where he has written about personal finance and investing since 2007. He is also a contributing editor for Forbes Advisor and host of the “Financial Freedom Show” on YouTube.
GOBankingRates had the opportunity to chat with Berger about how he became financially able to retire at 49, why expenses are more important than income when it comes to retirement planning and the importance of paying attention to investment fees.
What advice would you give your younger self about planning for retirement?
The advice I would give is that the best thing money can buy is financial freedom. In my 20s, I saw retirement as something that would occur 50 years down the road. Eventually, I realized that the goal isn’t retirement, at least in a traditional sense, but financial freedom. And financial freedom is a journey more than a destination. When your mindset changes to financial freedom, it makes it far more immediate and tangible than retirement five decades down the road.
What is the best thing you did to boost your own retirement savings?
I maintained my standard of living even as our income grew. This allowed me, over time, to save more than 50% of our income and achieve financial freedom (i.e., I could stop working if I wanted to) by the age of 49.
What is the biggest mistake people make when retirement planning?
They base retirement needs on their income rather than their expenses. It’s how much we spend that should be the focus of retirement planning. Our income is, of course, important, but it’s spending that determines how much we need to retire.
What is the one thing everyone should do right now to ensure they are prepared to retire?
While there’s no one thing that can prepare us for retirement, an important step that many neglect is to reduce investment fees. It’s easy to do with index funds and can increase a portfolio by hundreds of thousands of dollars over a lifetime of investing.
Jaime Catmull contributed to the reporting for this article.
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