Are you dreaming about an earlier retirement, but unsure how to go about it?

According to the Australian Bureau of Statistics, 40 per cent of Aussie men and 35 per cent of Aussie women are planning to work past age 70 because they are worried about their ‘financial security’ in retirement.

But what if your goal is to retire earlier? What can you do to ensure you’ll have enough money to last you through retirement? Here are some tips to consider.

1. Have a financial roadmap. It’s a good idea to map out things like your financial goals, including major payments, health care needs and any government benefits you’ll be able to receive at different stages in your life.

2. Live more modestly. Get serious about spending less and saving more. Sign up for DIY courses to fix things yourself instead of paying to have them done. Buy groceries in bulk and share the cost with your family, friends or neighbours. Take advantage of transport and other concessions if you’re over age 60 with a Seniors Card.

3. Manage your finances well.Learn about managing your money, refinancing or consolidating your debts.

4. Pay off your home loan sooner. The number of people over the age of 65 who are still paying off a home loan has increased by 54% in recent years[1]. If you can relate to this, think about making extra payments to increase the equity in your home or use an offset account to help you pay off your home loan sooner.Or look at other options, like making fortnightly repayments rather than monthly to reduce interest, fees and charges. If your interest rate falls, keeping your repayments at the same amount could shave even more off your home loan.

5. A little sacrifice goes a long way.The more you can put into your super, the sooner you may be able to retire. By salary sacrificing some of your before-tax income into your super, you’ll generally only be taxed at 15%, which is lower than most people’s income tax rate.

6. Make your after-tax dollars go the distance. If you make personal after-tax contributions to your super, you could be eligible for a government co-contribution of up to $500 per year. Or your spouse could receive a tax offset by contributing to your super on your behalf.

Retiring early is a possibility, but it’s likely to take a bit of hard work, some sacrifice, and a plan to make it happen.

Source: AMP.

[1] http://www.finder.com.au/press-release-when-youre-64-will-you-still-be-in-debt

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