More and more employees are deciding not to provide traditional pensions to their employees, which allowed them to augment their guaranteed income and even retire early in the past.

You are in the fortunate minority if your job provides a pension, but it may not cover all of your needs if you expect to live lavishly in retirement.

It's critical to have a strategy in place, whether you have a traditional pension or not, if you want to make your dream of retiring early a reality. Here are a few suggestions for reaching early retirement.

Make Practical Calculations

For many people who have worked hard for decades, early retirement is a dream, but is it a realistic goal? To ensure that you can afford to take such a major move, undertake sensible calculations — taking into account that your retirement may stretch four decades if you start early. You need to consider how long your money will last in retirement.

What's more vital is to account for changes brought on by the global financial crisis, which may have an impact on your monthly payments. According to an OECD analysis, social lockdowns have decreased workers' and employees' ability to contribute to private retirement plans, while defined benefit schemes' liabilities are expected to expand.

It's critical to reevaluate your present pension structure and position at this point to verify you're still on track to retire early, and to make any required revisions if this plan appears to be jeopardized.

Try Not to Dip Into Your Retirement Savings

If you've been laid off or have had your hours reduced as a result of the pandemic, you may have contemplated tapping into your retirement fund to help with the financial load.

As tempting – and in some situations, necessary – as this may be, it should only be done as a last resort, with experts predicting that it will have "a negative impact on future retirement incomes." In other words, it would be a gain in the short term but a loss in the long run.

People should not rely too heavily on the existing State pension, as the number of workers per retiree is predicted to drop from 5 in 2019 to just 2 by 2051.

The latter statistic, along with our longer life expectancy rates, implies that not only is it unclear what the State pension will be able to offer retirees in 30 years, but it's also becoming increasingly likely that we'll have to make due with smaller retirement earnings for longer periods of time.

This is all the more incentive to maintain contributing to your pension fund while you still can – and to leave it alone until you need it.

Invest as Much as Possible In Your Final Years of Working

 As you get older, the tax benefits available on pension contributions increase, which is great news for people who start a pension fund later in life.

According to existing guidelines, persons between the ages of 50 and 54 can contribute up to 30% of their net relevant earnings tax-free. Over the age of 55, this rises to 35%, with individuals aged 60 and over receiving tax relief on a whopping 40% of their net earnings.

With such incentives in place – and the fact that many professionals reach their peak earning potential after the age of 50 – there is plenty of opportunity to save a significant sum throughout your later working years, allowing you to afford a longer retirement period.

It’s Never Too Early to Start Planning for Retirement

The great majority of working professionals will have become accustomed to a specific lifestyle and quality of life by the time they retire. To live comfortably as a retiree, it is projected that an individual will need to save aside two-thirds of their pre-retirement income each year.

 This is a sharp reminder that it's never too early to start saving for retirement. Investing early allows you to ride out the peaks and troughs of market changes with less stress, allowing you to recoup any losses while continuing to build up that fund.

If you take advantage of employer contributions, planning ahead ensures that your pension fund will benefit from the added boost for a longer length of time.

As a result of the epidemic, 11% of employees have had their contributions suspended entirely, while another 15% have had their payments decreased. The longer you stay in the game, the more likely you are to recoup these expenses.

Pay Off Your Debts and Avoid Taking On New Ones

This may appear to be self-evident, yet it is crucial. Each long-term debt you take on puts assets in jeopardy that may be used for retirement. You're also raising your expenses by paying interest. Interest payments always resulted in higher costs.

Diversify Your Income Streams

This could mean taking on part-time work or a side hustle or investing in income-generating assets such as a rental property or a small business. Alternative sources of income can help you cover your living expenses so you can put more money towards your long-term goal.

People are living longer lives, which means they will have more years to spend in retirement. For many people, retirement can mean moving to a tropical paradise, spending more time with family, or being able to do something you actually enjoy, such as charity work or travel.

Whatever it means to you, the more you plan now, the better placed you will be in the future to prepare for retirement and, if you're lucky, to realize your dream of retiring early.