If you are in your early 30s, you may want to retire early. Especially if you're not passionate about your work. However, most people have to work for a long time in life, that is, until the age of 60. This is because most people (due to circumstances or financial discipline) can't handle a job. Such early retirement goals require a high savings rate.

Although the idea of early retirement is tempting, it's not easy at all. Let's take an example:

Imagine you're 32 years old and you're tired of your job. You aim to be financially independent (option to retire early) by the age of 50 for practical reasons.

You have 18 years to save money for your retirement. But as life expectancy increases, you're likely to live to 85-90 or more. So, if you are retiring at 50, you need a corpus that will help you prolong your retired life of 40 years (50 to 90 years).

At the age of 32, you should have a simple retirement planning exercise with a current annual expenditure of Rs 7.5 lakh, an average inflation of 6 per cent over the years, a post-retirement return of 7-8 per cent, and an equity-debt portfolio of around 60-40 per cent at the time of accumulation. Over the years, it will cost you around Rs 6 crore-Rs 7 crore to take an early shot at retirement at the age of 50.

Below are some general points to keep in mind:

• First things first, making a profit for early retirement may not be your only goal. If you have a family, then you need to save separately for the future of your children (higher education and marriage), buy a house to live in, etc. The money required for all these goals will be in addition to the retirement corpus.
• Once in a few years, there will be large non-annual expenses. Such as home repairs, car purchases, etc. They don't typically feature in regular expenses, but when they do, they take a portion out of savings. So, if you want to retire early you have to plan this aspect also.
• Since you'll have more than one decade of life after retirement at 50, it's best to be conservative in assumptions, to increase the chances that your corpus will last a lifetime. If not, it can help avoid the dreaded situation of running out of money years before it's due.
• Everyone wants to live a long life. But you need money to live longer. Therefore, it is necessary to plan for more years.
• You'll have health insurance. But keep some buffer for uninsured medical expenses in later decades. Your insurance doesn't cover everything. So, plan to set up a medical contingency fund.
• Be aware of the sequence-of-return-risk. Most people don't know or understand it. But if left unattended and your luck turns against you, your retirement plan could be derailed.
• One of the greatest dangers is ignorance. You only have one shot to properly save for the goal of Retire@50. You have to be sure of the numbers. Because, if you misunderstand it (saving less and retiring with more than adequate corpus) and realize it after a few years of retirement, you will not be able to go back because you will not get any job. So, make sure you get the (earlier) retirement numbers right. If you can't do that, seek the help of an investment advisor.

Early retirement is still an attractive goal for many, especially young people. But it will require a lot of savings (read about this formula to accelerate early retirement). And one more thing - in an effort to quickly reach the destination, do not avoid enjoying the journey itself. So, while you definitely need to save and invest to become financially independent soon, don't sacrifice the present for an imaginary future of transcendence.