Are you looking forward to the day when you can finally relax and reap the financial rewards of a long career?

It seems that with the age of retirement and the cost of living going up, many of us will be working well into older age. However, if you apply some financial discipline early on in your working life, it is possible to plan ahead, allowing you to enjoy the fruits of your labour sooner rather than later.

Early retirement is defined as giving up work before your state pension age, which is currently 66 years for both men and women (due to rise to 67 between 2026 and 2028). If you have enough financial resources, you can choose to retire earlier, from age 55 onwards. In order to make early retirement a reality for yourself, there are a number of steps you can take.

1. Build up your pensions pot

Putting money away into a savings account on a regular basis is a healthy financial habit to get into, whatever age you are. However, if you are saving for retirement, you are better off making contributions directly into a private pensions plan. Paying in more when you’re younger takes the pressure off later in your career, though you can of course increase your contributions at any time.

As one financial expert advises, “it has never been more important to get your pension in order. Your pension fund is one of your largest and most important assets that will help to support you into old age and ensure you can maintain a good standard of living in retirement.”

The magic ingredient for long-term investment return is called compound interest. Also known as interest-on-interest, it works by accumulating over time, turning a small pension pot into a substantial sum when left untouched. Add to this the generous tax relief available on your private pension contributions, and it’s easy to see why pensions are one of the most efficient ways to grow your personal wealth for retirement.

2. Budget for your retirement

It helps to have a clear vision of what you would like your retirement to look like and what you would like to be doing once you’ve stopped working for a living. Whatever your heart is set on, work out how much this is likely to cost versus what your income will be.

Whether you would love to pay off the mortgage, retire abroad or invest in a new venture, use your dream to help you plan out your retirement years while you’re still working. Don’t forget to add in any income you may receive from rental property and investments including products such as ISAs.

Also obtain up-to-date statements on the value of your private, workplace and state pensions to help you estimate how much will be coming in per month. Pension Wise gives free and impartial government guidance that is well worth taking. Bear in mind that up to a quarter of your pension pot can be withdrawn tax-free, usually once you have reached the age of 55, for you to use or invest as you please. Combining pension income with tax-free income from an ISA, for instance, can help you maximise your personal tax allowances and basic-rate income tax band. It is highly recommended that you take independent financial advice before making any decisions.

3. Maximise your property assets

Property ownership opens up further possibilities to help you gain financial independence from having to work for a living. What about investing in rental property or a holiday let as a way to generate an additional income stream?

Had you thought about downsizing or relocating to free up some of the equity tied up in your home? If your home is too big for your needs but you’re not keen on moving out, you might look into letting out the spare room, either through the government’s Rent A Room Scheme or platforms such as Airbnb. Similar websites exist for renting out a garage, driveway, or storage space.

If none of the above appeals, there is always equity release – a lifetime mortgage that lets you tap into the cash value in your home while you carry on living there. You have to be aged 55 or over in order to be eligible, and you can use the loan as you see fit, including for investments or to boost your retirement income.

4. Change, don’t end, your working life

Retirement, including early retirement, doesn’t have to mean the end. As one door closes, another one opens, with a world of possibilities still out there for you to take advantage of. Perhaps you’ve always wanted to travel the world or start your own business? Maybe you’ve been longing to express a different part of your skillset but couldn’t fit it into your chosen career path?

Semi-retirement could be an excellent way towards realising your dreams and experiencing a different lifestyle without giving up work altogether. Try to negotiate a reduction in hours at work, so you can ease your workload while still delivering plenty of expertise to your employer. Or you could get a part-time job geared around your current skill set, which would allow you to free up time to invest in a new venture and gain a realistic perspective of what retirement might look like.

Rather than putting your feet up for the rest of your life, take the opportunity of early retirement to start a new and exciting chapter to make your autumn years the most rewarding they can be.