Many people daydream about early retirement and don't realize that it can become a reality with some simple retirement planning, investment goals, and an understanding of investment basics. Obviously, retirement planning needs will vary, depending on what age and stage of life an individual is at. But with some solid retirement goals and a set retirement plan, early retirement is a completely

1. Set retirement goals.

The first step to successful retirement planning is to set retirement goals. Decide on an appropriate retirement age and a desired lifestyle once retired. Many of today's active retirees prefer to travel, so extra money should be budgeted for travel expenses if this is the case. The earlier the goal retirement age, the more aggressive retirement planning and savings efforts must be in order to obtain early retirement.

2. Monitor spending habits.

All sound financial planning involves tracking expenses against income. Just as businesses constantly review their cash flow, individuals should do the same with their regular expenses, especially if retirement planning is a priority. After a month or two of reviewing daily outflow, it will become clear where savings can be maximized. Cost-reduction doesn't have to involve drastic measures. It's those regular expenses, such as those twice-a-day, $4 cappuccinos that quickly snowball over the course of a month or year. The money spent on designer coffee can be put to better use by investing or saving for early retirement.

3. Start saving money-now.

Most people put off doing things that are tedious or difficult, and saving for retirement usually falls into one of these categories. Start saving money to ensure that you have enough money to satisfy your retirement goals once you're ready for early retirement. For an individual who's younger than 30 years of age, a good target is to save 10% of gross income-not income after taxes, but the full amount of gross salary before taxes and other deductions. After a short period time, most people won't notice the difference in their take-home pay, but their savings will grow substantially. Far from being difficult, this is the easiest and surest way to reach your retirement goals and achieve early retirement.

Those over age 30 who are dreaming of an early retirement should accelerate their savings to 15% or more, if possible. Everyone should invest in employer-sponsored retirement plans such as a 401(k) plan, matching contributions, and any other retirement benefits. This should be done in addition to saving on one's own for early retirement. These combined contributions will make a big difference over time and help you achieve your retirement goals. Steady and regular contributions to retirement plans make retirement planning easy and painless.

4. Make smart investments. Know investment basics.

For the potential early retiree, it's important to learn some investment basics. This doesn't require formal education; the Internet is an excellent free resource for just about any topic, including early retirement. If you want to be sure the investment basics are authoritative, consult local extension courses. Seminars in early retirement planning and investment goals are usually available. It doesn't take a financial genius to understand investment basics. It's all about achieving results, so look into index investing, or if there are more complex investment goals, consider consulting a financial advisor about your early retirement goals.