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3 Basic Tips to Achieve Early Retirement

Everyone that I talk to about early retirement says pretty much the same thing: It would be nice, but I don’t see how I can afford it. On the one hand, when I hear these sorts of statements, I can understand what they are talking about. It’s hard to set yourself up with enough money and income that will last you for the rest of your life and the last thing anyone wants to do is to run out of money. It’s hard enough to pay your bills with earning the income that you do, right?

Yet, on the other hand, early retirement is a lot easier to obtain than most people think. If you want it badly enough, you CAN make it happen. It’s all a matter of setting financial priorities. Here are some basic tips to enter retirement a few years earlier.

Minimize Expenses – Some people may think this goes without saying, but considering that most people don’t know how to save money, this is an important step to cover. Not only does living on less money each year give you more money to put towards retirement, it also reduces the amount you need to save. If you save an extra 10% of your income each year, that means you become used to living on that much less. Here’s an example that should give you a better picture of how spending less can help you retire earlier (ignoring inflation and interest rates for simplicity). Let’s say that you make $60,000 per year and that you have been saving 10% towards retirement, meaning that you are living off of $54,000. If you were to save an extra 10% or $6,000 per year, you would become used to living off of $48,000. If we are assuming that you are going to live 30 years into retirement, that is $180,000 less that you need to save AND an extra $6,000 each year to meet that smaller savings goal.

Diversify Income – Most families that I know are currently living off of one or maybe two incomes (if both adults are working). While this is certainly their right to do, it also eliminates the option of additional financial security. By developing multiple sources of income, you can speed up the process of retirement. Early retirement may not seem that big of a dream if you start earning $2,000-$3,000 from passive income. You may think that is impossible to accomplish on your income, but let’s look at another example. Imagine buying 2-3 rental properties over the course of your career. If you can pay them off over the course of 20-30 years, you could easily generate a few thousand dollars each month. If you add this income to your retirement funds, I bet you could manage to retire earlier than you thought possible.

Invest NOW – Last, but certainly not least, is the importance of investing and investing a lot! If you think you can manage to retire early without prioritizing investing, you have another thing coming to you. By starting early and doing it a lot, you will be ahead of the game and give yourself the opportunity to retire early. While the stock market may seem uncertain, compound interest is one of the best ways to significantly increase your net worth over the years of your career.

Early retirement may seem like a lofty dream to those struggling to pay your bills, but if you get serious about your goal and implement this basic steps, you will be that much closer to retirement. If early retirement and financial security mean that much to you, why not start working towards that goal today.

If you’re looking to retire it will be a good time to finalise your pension plan. Consider Pension release with

Readers, what other tips are important for achieving early retirement?

This post was written by Corey, a staff writer from 20’s Finances.



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Corey, when do you plan to pull the trigger?

    I think the secret is simply making a lot of money and saving a majority of it for a long time.

    • Yes, that’s probably the easiest way to do it. I’m not sure. I have a few things in the works that could push me over the top. Realistically, it will be at least a year, but who knows.

  2. I agree with Sam. It’s about making as much money as possible. Investing yes… but smart investing. Hedge your bets.

    • Yeah, I understand that Jai. 🙂 It’s hard to disagree with.

  3. you can also take early retirement by living in a cheaper country with money you have saved so far.

    • That’s a great tip SB. Thanks for sharing.

  4. Thats funny I just put up a post yesterday on our plan LOL. Now granted, most would never consider how we plan to do it but sometimes you got to be a little crazy to achieve something if the whole “Making lots of money” part just never seems to be working ( however I am not giving that part up either0 🙂

    • Glad to hear you are determined! Good luck with your plan.

  5. living frugally seems to be one of the best ways we’ve been able to save. I know kids will change things, but for now my husband & I try to have minimal “stuff” so everything we own could be packed up in one moving truck and our car.

    • That sounds great Jessica. I’d love to even be able to fit everything in my one car, but furniture takes up a lot of space. 🙂

  6. I am definitely saving more aggressively than a lot of people and when m girlfriend’s student loans are paid off we will save even more! After her loans are gone we will make our master plan I think.

    • Yeah, being debt free is essential to save a lot of money. Once you get to a positive networth, you’ll be doing well.

  7. I really wish someone had given me this advice right out of school. We are currently working on developing multiple streams of income. I wish we’d started ten years ago, but you can only go forward. I actually don’t mind work. I just want to be able to work when I choose, not because I’m broke.

    • I think everyone wishes they started earlier. haha. I also want to work because I want to – not because I need to. I’d also like to be able to do what I want, not what I have to in order to pay the bills.

  8. For those who are unable to earn or save a lot, it’s important to save whatever they can as early as possible – compound interest shows that you don’t have to put a ton of money aside if you do it early and often and find a safe way to invest it.

  9. Savings was the key for my early retirement. I saved early and invested in income property. Real estate is one of those areas where you can leverage your investment and grow your money over time. It worked for me!

    • That’s nice to hear. How many rental properties do you own Krantcents?

  10. Building my income and aggressively saving / investing it all. That’s the only way to get ahead of the curve. I’m trying to really focus on specific goals for how I will achieve this.

  11. People always say you should diversify your investments, but they don’t talk about diversifying your income as often, but I think that’s just as important. I only have 3 income sources now; 2 active jobs, and dividends. But by the end of this year I plan to take on another source.

  12. The first tip on cutting expenses is especially useful.

    I think a lot of people just pay the bills that come in every month without ever looking at how they can make those bills smaller (perhaps by cutting out services they don’t use).

    I agree with the general consensus in the comments, saving and diversifying income is the best way to get ahead of that nasty curve and achieve relative security!

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