1. Put your early retirement plan in writing: Formally ending work at age 40, 50 or even 60 is unlikely to happen through luck alone. Use an online calculator – such as Your Number from ING in the United States – to work out how much money you need to stop working at your desired retirement age. Then write down the steps you need to take to reach that goal.
2. Start saving for retirement as early as possible: The rule of thumb is to start saving for retirement early to harness the power of compound interest. Even students can consider putting a small amount away regularly – but they should think twice if the payments will push them into debt.
3. Don't "keep up with the Joneses": Your neighbour might get a new car but you don't have to. Shut out peer pressure and stay focussed on your retirement savings goals.
4. Be frugal: Little savings add up, so be frugal. An eZonomics poll about the attraction of immediate rewards showed how forgoing a daily €2 coffee adds up to €10 savings each working week and about €520 a year. Investing that money at 5% per year would see it build to €7,400 in a decade and €18,600 in 20 years.
5. Have a smaller house: Small saving steps add up over time but grand gestures can make a big difference much more quickly. By having a smaller house, it is likely mortgage or rent payments will also be smaller. Given the expense of housing, choosing to downsize could help those planning to retire early make a giant leap toward their savings targets.
6. Consider retiring to a "low cost" country: Retirement savings could stretch further in a country with a weaker currency. But beware of changing exchange rates (some Britons who retired in Europe struggled when the value of the pound dropped against the euro in the recession) and don't forget to factor in cover for healthcare you are likely to need in your golden years.
7. Use the tax system: Many countries offer tax breaks for earnings channelled into retirement products (such as pensions). Using such provisions can help reach retirement goals more quickly.
8. Bank the windfalls: If money unexpectedly comes your way, resist the urge to splash out. Instead stick to a budget and bank the windfalls to hit the marks on your early retirement plan.
9. Diversify your investments: We know the dangers of "putting all your eggs in one basket", so spread investment risk by putting money into different asset classes. ING Group chief economist Mark Cliffe touches on the future of diversification in a video for eZonomics.
10. Follow the lifecycle approach to investing: One of the keys to retirement investing is to embrace the "lifecycle" approach to investing. The style centres on the idea that investments are tailored to particular stages in an investor's life. Importantly, investors reduce exposure to riskier investments (such as shares) towards less risky assets (such as government bonds and cash) as they get closer to their desired retirement age.