As the financial independence movement continues to gather steam, many of us may wonder if we too are ready to retire early and be free from the shackles of full-time work.
I’ve looked at 3 factors that are worth considering before you pull the plug and retire early in 2020.
1. You’re more worried about your ASX portfolio than your job
Instead of putting your head down and working hard in that 9 to 5, you’re increasingly finding yourself checking out how that ASX portfolio is performing.
Whether it’s checking that Afterpay Touch Group Ltd (ASX: APT) investment or seeing when the next BHP Group Ltd (ASX: BHP) dividend payment date is, you’re increasingly focusing on portfolio management rather than income generation.
If this is the case, it could be a sign that you’ve got enough wealth built up in your investments to out-earn your full-time job, meaning an early retirement might not be far away.
2. You’re comfortable living off your dividend income
One of the scariest parts of early retirement is wondering whether you’ll have enough income to sustain your current or expected lifestyle into your later years.
While it can be hard to accurately forecast expenses, particularly those around healthcare as we get older, a solid dividend income from your ASX 200 portfolio could provide a great safety net.
High-yield ASX 200 stocks such as Alumina Limited (ASX: AWC) or National Australia Bank Ltd. (ASX: NAB) can provide that extra boost as you transition towards retirement, knowing that you’re not going cold turkey on earning cash in the immediate future.
3. You’ve got your personal finances in order
One huge step in the retirement phase is making sure that your financial house is in order, and this is where an experienced financial advisor can be worth their weight in ASX gold shares.
Before pulling the plug and walking away from a salary that may never be on the table again, it’s crucial to evaluate your financial situation and include detailed scenario analysis for the future.
Once you’re comfortable with where your finances are at, and have preferably sought out a second (or third) opinion, that’s when you can seriously consider taking up your next offer of pina coladas on the beach.
The reality is that while retirement might seem scary, a good investment portfolio and solid financial planning can lighten the load.
One good way to test the waters could be to cut back to part-time hours at work, try your hand at a new hobby or side business or take a few months of long-service leave to see if early retirement is right for you.
For those seeking to add to their dividend income, check out these 3 high-yield stocks below!
With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.
Hint: These are 3 shares you’ve probably never come across before.
They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”
We think these 3 shares offer solid growth prospects over the next 12 months. Each of these three companies boasts fully franked yields and could be a great fit for your diversified portfolio. You’ll discover all three names and codes in "The Motley Fool’s Top 3 Dividend Shares for 2019."
Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!
The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.
Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.