I want to retire before 50, so I asked a financial planner for 4 tactics his clients use to retire early without sacrificing their lifestyle

Jay Pelham, President at Kaufman Rossin Wealth, has provided his insights to Business Insider, for the article, “I want to retire before 50, so I asked a financial planner for 4 tactics his clients use to retire early without sacrificing their lifestyle.” The article details strategies for planning early retirement.

Article Excerpt:

“If you’re thinking that you’d like to have a certain lifestyle when you’re retired, you can determine how much money it will cost you every year to live that way,” said Jay Pelham, CERTIFIED FINANCIAL PLANNER™ professional and president of Kaufman Rossin Wealth. “Knowing that will help you understand how much money in assets you need to retire.”

1. Pay close attention to your spending habits

“Of course, if you buy less expensive clothing and cars, that would make a difference,” he said. “But if you’re trying to maintain your lifestyle, there are other areas to look at.”

Pelham said to start by examining your services and insurance policies. “You might get a discounted rate for consolidating these services under one provider,” he said.

“Life insurance is one policy that’s worth double-checking to make sure you have the best price for the level of coverage you want,” he said.” Additionally, it’s worth looking at combining homeowners, auto, and other policies to receive discounts.

Another area of spending people can look into is how they are managing to pay off their debt. “Some types of debt might even be tax deductible,” he said. “Check to see if you can consolidate debt, get lower interest rates, or change terms.” You may want to have a financial advisor or accountant take a look at your debt to help you strategize.

2. Relocate to an area with a lower cost of living

“When you trade a high cost of living location for a lower one, you’re able to cut your expenses down quite a bit,” he shared. “Plus, if you own a house, you could cash out the equity once it’s sold and buy a less expensive house in that new location and use the rest of the cash to help you save or invest for retirement.”

For example, Pelham said that some of his clients who live in Miami — one of the most expensive cities in Florida — but work remotely, decided to sell their house and move to other parts of the state.

“A client of mine moved to Gainesville, which costs less to live in, and they were able to maintain their income, lower their expenses, and cash out the equity from their homes,” he said. “Those steps could help position them to retire much earlier than they originally planned.”

3. Take a close look at your asset allocation

“One thing people can control, as they plan for early retirement, is their asset allocation,” he said. “Look at how much money you’ve invested in different categories or perhaps assets you haven’t invested in that could be beneficial to your overall portfolio.”

“For example, if you’re saving $20,000 a year in a savings account rather than in a 401(k) plan, which helps reduce taxable income, that’s a change that can help a person save more for retirement,” he said.

4. Review your retirement accounts

“Some people who have worked for multiple different employers might have untouched 401(k)s that they forgot about or didn’t ever combine,” he said. “The money might be sitting in those accounts on autopilot without any type of investment strategy.”

Read the full article at Business Insider.