Unfortunately, the global pandemic has caused more money problems for millions of Americans. If there was a retirement-saving issue before, this has only grown stronger with people forced away from work (and even let go by their employers). According to one survey, nearly two-thirds of workers aren’t on track for a secure retirement.
The pandemic has forced people away from work, student debt is still a problem, and Americans are struggling to save. With this in mind, some are hacking the system somewhat and semi-retiring instead.
Essentially, semi-retirement is the idea of earning a small amount of income while working less and ticking things off the bucket list. We know that some people will read this with a confused look, wondering how they can work less with so many bills and other costs. We’re here to bring you a secret today – if you want to semi-retire and start enjoying more free time, reduce your costs.
With lower costs, you don’t have to work so hard to meet them. It might sound obvious, but the reason many Americans are forced to continue working is that they have so many ends to meet. By reducing costs and commitments, you don’t have to work so many hours and you have more time for vacations, walks with friends, pets, grandchildren, and more.
Tips for a Successful Semi-Retired Life
Want to work a little and live a lot? If so, follow the tips below to set yourself up for a successful semi-retirement.
1. Consider Downsizing
Do you really need a large house? Housing is the largest expense for many Americans, and some have homes that they simply don’t need. We’re sure you’ve worked hard for your home, but you’ve also worked too hard to struggle in retirement. By downsizing, you immediately reduce expenses with lower utility bills and less maintenance (you could also have a pot of money from the profit!).
After selling your large home and buying a small one, you can use the difference to start ticking items off that bucket list. If you want to enjoy semi-retirement, downsizing after children have left the nest is one of the best things you can do.
2. Pay Off the Mortgage
If you talk to all those who enjoy retired life, you’ll soon find that a paid-off home is a common denominator. The sooner you pay your mortgage, the more freedom you have with earnings. Suddenly, you don’t have a mortgage taking most of your earnings each month. We spoke about reducing those costs, and what better way to reduce the amount you need to survive than paying off your mortgage?
Although some people will recoil at this suggestion, you might find it easier to pay off your mortgage than you first thought. Realistically, many homeowners can save themselves five to ten years on a 30-year mortgage just by paying an extra $100-200 per month. Not only do you save time, but you also save thousands in interest payments.
Even if you don’t have this amount to spare, perhaps you can pay an extra $50? Every little extra payment helps. Can you eat out fewer times per month? Can you cut back on the TV subscriptions? Can you cut back in other areas to lose that mortgage sooner?
3. Simplify Living
We mentioned it in the previous tip, but try to simplify your life. As well as saving money, you’ll also relieve yourself of much stress (hooray!). With fewer possessions, you save money and don’t need to find room to store it all. For example, many couples can get by with just one vehicle. This makes a huge difference because you’re no longer paying registration, insurance, maintenance, taxes, and other expenses twice.
As a test, walk around your home now and see if there’s anything you can sell to lighten your load. With a minimalist lifestyle, you declutter your home and decrease your cost of living.
4. Create Avenues of Passive Income
Imagine a world where you earn income for work that you’ve already done – this is called passive income, and examples include peer-to-peer lending, investing, and book publishing. With self-publishing easier than ever through Amazon Direct Publishing, you can write books, make them available for Kindle, and sell them for many years to come. Although only one initial investment (mostly in time), you’ll earn for every sale.
Normally, passive income sources come from a large initial investment. Writing an ebook might take some time, but the idea is that the quality should keep sales coming in for many years. Even if you only sell 100 per month at $1 each, this is still an extra $100 per month. Now imagine having several books on the Amazon Kindle store all generating passive income.
Even if you don’t have much to start, investing is another strong option. Even if you only have $100 sitting in an account, everybody must start somewhere.
5. Remove All Debt
Again, we know that nobody has a magic wand. However, just imagine a world without debt (and all that nasty interest!). Don’t just accept that debt is a part of life; start paying everything off. Whether a credit card, medical bill, or car loan, do everything you can to reduce the amount owed. If possible, consolidate all your loans into one so that you aren’t punished with interest several times.
Eventually, you’ll have the double benefit of keeping income and not having to pay interest on top of all loans. Set SMART goals in the short term to achieve your long-term goals. Most people dig their heads into the sand when it comes to debt; instead, set an achievable goal, work out how much you can pay each month, and get started today. The sooner you eliminate all debt, the sooner you can enjoy a semi-retired life.
Five Steps to Semi-Retirement
Pay off the mortgage
Simplify your lifestyle
Earn passive income
Remove all debt