Ramit Sethi, the financial guru behind the bestseller “I Will Teach You To Be Rich,” recently gave some advice about planning for retirement in his newsletter. He was answering a 39-year-old reader who wanted to know whether they could retire in their mid-50s. Sethi said yes, they could, but he also said that retirement isn’t just about having enough money.
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He suggested four important questions everyone should ask themselves when thinking about retirement.
What Do I Want My Life To Look Like in Retirement?
This is about picturing your ideal retirement. Sethi said you should think beyond just having enough money. He suggested thinking about these things:
Sethi called this designing your “Rich Life.” It’s about figuring out what really matters to you.
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What Would Make My Life Magical Right Now?
Sethi doesn’t think you should wait until retirement to enjoy life. He suggested thinking about small things that could make your life better now, without messing up your future plans. For example, you could eat out one more time each week or buy fresh flowers regularly.
These small changes might not cost much but could make life more fun right now.
What Are the Things You Want To Do ‘Someday’ — and Could You Start To Test Doing Them Now?
Instead of waiting until retirement to do things you’ve always wanted to do, Sethi suggested trying them out now. This can help you figure out whether these activities are really what you want for your retirement.
How Can You and Your Significant Other Build Something Meaningful Together?
For people in relationships, Sethi said it’s important to plan retirement together. He encouraged couples to think about what they want to achieve as a team in retirement.
How To Make These Answers Possible
Sethi gave some tips on how to turn your answers into reality.
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Use his “Journal to design your Rich Life” to help clarify what you want.
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Keep track of your spending using what he calls a conscious spending plan.
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Regularly check and adjust your financial plans.
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Try to invest a lot of your income. The reader Sethi was advising invested 40% of their take-home pay, which is why they could retire early.
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Keep your fixed costs low so you can save and invest more.
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Know your finances well. Sethi was impressed that the reader knew exactly when their student loans would be paid off and how they handled their investments.
Sethi showed that if the reader kept doing what they were doing, they’d have $2.8 million by age 55, which would give them about $112,000 to spend each year in retirement. If they waited two more years, they’d have $3.3 million, or $132,000 to spend each year.
The main point Sethi made is that retirement planning isn’t just about saving money. It’s about creating a life you’ll enjoy. He wants people to think deeply about what they really want in retirement — and start working toward that vision now.
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This article originally appeared on GOBankingRates.com: Ramit Sethi: 4 Questions You Must Ask Yourself for a Rich Retirement