I'm a financial planner, and I see people make 5 big mistakes when planning an early retirement

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• Retiring early is a dream for many, but it leaves little room for error.
• If you want to retire early, your savings strategy should be aggressive, and you need to invest your savings.
• You need a plan for how you'll compensate for benefits you'll lose from your job when you retire.

Early retirement is the ultimate dream for many people who prioritize freedom and flexibility. But achieving that goal is a tall order, and there's little room for error.

Don't let these five common mistakes prevent you from reaching your early retirement goals. I'm a financial planner — here are the big mistakes I see often and how to avoid them yourself.

1. Skipping out on (or delaying) saving aggressively

Not saving enough is the biggest financial mistake almost everyone makes, regardless of their specific goals. If you want to retire early, maintaining an aggressive savings rate during your working years is a requirement for achieving that goal.

At my financial planning firm, we recommend most of our clients invest a minimum of 25% of their gross household income a year in long-term investments . But for those who want to retire in their 50s, that recommendation rises to 30% to 50% of their income. Retiring pre-50 likely won't happen unless you put away well over half of your income between now and then.

What to do instead: Prioritize your savings. Treat it like a non-negotiable expense, then automate it to ensure a portion of your income goes directly and immediately into your retirement and investment accounts when you get paid.

2. Saving your money but forgetting to invest

We once had a client come to us with hundreds of thousands in a 401(k) ... and almost all of it was sitting in cash. It was an impressive amount of savings — and a horrifying opportunity cost.

That money spent years sitting on the sidelines rather than being invested in the market with the ability to compound over time. Letting cash sit in your portfolio creates cash drag, which reduces your overall returns.

You can also have too much cash sitting around in a bank account . While you absolutely should have a cash reserve for emergencies, you shouldn't keep more in an emergency fund than you actually need on hand, as you'll miss critical opportunities for growth.

What to do instead: Assess your cash needs and invest any excess in a globally diversified portfolio for long-term growth. If you want to retire early, you need every available dollar working to earn more dollars. Periodically review your portfolio and eliminate cash drag.

3. Failing to diversify investment account types

Your current 401(k) can help you build up the savings you need to retire, but if you want to retire early , you may not be able to access that money without incurring penalties and taxes.

There are workarounds, but the general rule is that you cannot access money in qualified retirement accounts before age 59½. If you retire at 50, that's nearly 10 years of your life that you need to fund from other sources.

Just like too much concentration in a particular asset within an investment portfolio can create unnecessary volatility and expose you to more downside risk, relying on a single type of retirement account can limit your financial flexibility in the future.

What to do instead: Work toward your early retirement goal by deploying a mix of tax-deferred, after-tax, and taxable accounts. By saving into a variety of vehicles, you create more options for funding lifestyle regardless of your age when you choose to retire, and you also give yourself the ability to manage your tax liabilities more effectively.

4. Relying too heavily on your employer's benefits

If your plan only works so long as you stay at a certain employer, making a specific income for a defined number of years, it's risky. So much depends on factors outside your control.

Similarly, if you need to receive a particular amount and kind of compensation (like equity, deferred comp, or a pension), it might be hard to leave that employer before the standard retirement age.

What to do instead: The engine of your financial plan should be your own savings rate so you can choose to stop working when you want. Instead of maxing out what you can spend and choosing to save less because you think your benefits or aspects of your comp package will make up for any shortfalls, make sure your plan works even without the perks your employer may give as incentive to retain you as an employee.

5. Forgetting to expect the unexpected

There's a difference between a plan that looks great on paper and one that will withstand the uncertainty and unpredictability of real life.

If you want to build a flexible financial plan that allows you to retire early — even when life throws you curveballs — you need to account for potential risks and uncertainties rather than assuming best-case scenarios.

What to do instead: Build buffer room into your plan by using conservative estimates for income, bonuses, and investment returns. You should also maintain an emergency fund , reduce investment risk by diversifying, and avoid overextending on fixed costs while also saving more than you think you have to if you want to be financially resilient.

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