How to Retire Early

Early Retirement

Written by leahb

April 16, 2023

Lots of people want to retire early, but few make the effort it takes to do it. Some people are interested in the idea of early retirement, but think it would be too hard. I’m sure some think it is impossible. And it might seem that way from your current perspective. If you put some time into planning it though, it might just start to seem possible. Or even probable.

FIRE graphic from Canva Pro

There is a whole movement called FIRE, Financial Independence, Retire Early.

These people are dedicated to finding ways to make their goals happen. Some of them have a Lean FIRE goal. This involves living extremely frugally, or a minimalist lifestyle in your working years and in retirement. Some have a Fat FIRE goal. Retiring with income that more than covers the living expenses of what you consider a great lifestyle. Some just plain FIRE. As you might expect, plain fire is the goal in-between.

  • Define your goals
  • Maximize your savings
  • Minimize your expenses
  • Maximize your earnings
  • Create passive income streams
  • Plan for health care costs
  • Minimize or eliminate debt

Taking the following steps will certainly increase your odds to retire early. Whichever goal you set for yourself. Starting with the plan.

Step 1: Define Your Goals to Retire Early

The start of any good plan is to define the end goal. You need to think about –

  • How do you want to retire early?
  • What exactly does early retirement mean to you?

Start with what age you want to be when you retire. Whether you choose 35, 45, 55, or anywhere in between, the amount of time you have to work will shape your plan. As will the number of years you will need to your early retirement before your retirement assets kick in. Next, think about the FIRE examples above.

  • What you want your lifestyle to be like?
  • Do you plan on a quiet retirement near your family so you can spoil your grandchildren?
  • Or do you want to travel the world in style?

Whatever options you pick, you will need to do some math to figure out how much that lifestyle will cost in your first year of retirement. And for the years afterwards. The rate of inflation in the USA is usually estimated at an average of 3%. The last couple of years have shown that 3% isn’t always going to be accurate. You will have to decide if you want to be conservative or not in your estimates.

There are some amazing bloggers out there who cover the spectrum of FIRE goals. For a Lean Fire approach, check out Root of Good at This link explains how he retired at 33.

For a Fat FIRE approach, check out Financial Samurai at

I also like the Mad Fientist

If you want to find your own favorites, just search for Financial Indepence, or FIRE, and you should get a few more results.

Step 2: Maximize Your Savings

Assuming that you work for a living, you are going to need to save a lot to retire early. Start saving as soon as you can. Seriously. The earlier, the better. Even if you can’t save much when you start. Set up an account for your savings or investments and make consistent deposits. Set up a budget so you can see where you can save more. When you get raises, or find a better paying job, don’t immediately raise your lifestyle to match. No matter which FIRE goal is for you, all of them require saving a large percentage of your income.

Step 3: Minimize Your Expenses

Early Retirement is largely funded through your savings and investments. In order to have money to save, you have to live below your means. Housing and transportation are typically the most expensive sections of a budget. Concentrating on lowering your costs in those areas will make the most difference. Regularly review your actual expenses to confirm you are staying in budget for each item. And that you still use all of the things you are auto-billed for. Cancel the stuff you aren’t using or no longer need.

Step 4: Maximize Your Earnings to Retire Early

Budgeting for your Early Retirement is important. But there is a limit to how much you can economize. You still need a place to live and food to eat.  Increasing your ability to earn is a better option if you can. Improving your skills to be better at your current job so you can be promoted. Or get a better paying job somewhere else. Learn new skills to broaden your options and make you a more valuable employee. Take up a side hustle. Whatever makes the most sense for you.

Written by leahb

Step 5: Create Passive Income Streams

Creating passive income streams is another option for your Retire Early plan. Technically, the investment income you save is passive. If you have enough saved that you can live off of that, then great! Some other examples are dividend stocks, rental properties, or book royalties. In uncertain times, it can be hard to trust the market.

Rental properties require work, or a property manager. But they tend to keep up with inflation, and don’t fluctuate like the stock market. Plus, if you get tired of being a landlord, you can always sell the property.

It takes a lot of upfront work to earn book royalties. Also a fair amount of skill, and luck. But if you have the time to write, and a story to share – you can always get someone to help with the marketing. Or learn that skill too!

The idea is to create income without taking too much time or effort on your part to keep the income coming. This can be used to increase your savings while you work. It could also possible generate so much income that you no longer need to work, or touch your savings. The longer your investments spend in the market, the greater your returns tend to be.

Step 6: Plan for Health Care Costs for Early Retirement

Healthcare is another large expense if you retire early. Most of us in the USA get health insurance through our employers. You will need to purchase your own policy or go without. Even if you are relatively young and healthy, you should be getting annual screenings. And accidents happen. So do unexpected illnesses.

If you plan on raising children during your early retirement, then health insurance is a MUST. Have a plan for how you are going to get and fund your healthcare costs.

Step 7:  Minimize or Eliminate Debt Before you Retire Early

Before you make the leap to retire early, consider your debt level. And what the stability of your income will be in retirement. If you are relying on market investments, volatility can make withdrawals painful. And effect your later years of retirement. Even with a more stable funding source, I still recommend getting rid of as much debt as you can before you quit the job. Large payments coming out of your early retirement income can create stress. They also reduce the amount you can spend on living. Pay it off first. Then quit.


Early retirement is possible for many. And you won’t know if it is possible for you unless you try. Pick your FIRE goal and build the plan around it. Choose the age you want to retire. Even if you are a year late, it still counts. And remember, goals can be moved to suit your life. Just don’t lose site of them completely. And above all, START EARLY. I can’t stress enough how important that is.

If you learned something from this post and would like to learn more, or do you have an idea for a post on a related subject? Subscribe or message me from the Contact Me form!

You can also check out other posts on Early Retirement here ->

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