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9 Ways to Make Retiring Extremely Early Possible

Retirement dreams… yeah right. These euphoric plans of the future often fizzle, fade, or just turn into an impossibility. Old age, cancer, disabilities – all these perils are killing our ability to retire the way we had always dreamed of. It’s becoming an undeniable reality for many…but it doesn’t have to be.

As I see it, rather than waiting till we’re 65 years old (and hopefully still in good health) to retire, we’ve got two other options:

  1. We can live life to the fullest today, cramming in as much fun as possible in between our working hours, or
  2. We can work our butts off today to retire extremely early tomorrow

In my opinion, both of these options beat the pants off of the “wait-till-we’re-65-to-live-life” plan. And in this post, I’d like to focus on Option #2 – working hard today to retire extremely early tomorrow.

9 Ways to Make Retiring Extremely Early Possible

Do you plan on retiring extremely early? It’s definitely possible, but it’s certainly not easy. For many of us, it’s going to require a radical lifestyle change – both in the present and in the future. You’ll probably get made fun of by your friends, your coworkers might start questioning your sack lunches, and to be completely honest…you’re probably going to want to quit this journey soon after you start. BUT, I wouldn’t recommend it, especially if it puts you back on the wait-till-65-to-live-life plan. Nobody should even admit to being on that plan.

Ready to make retiring extremely early possible? Here’s what it will take to get there.

retiring extremely early1) Live on Less Than Half Your Income

In Mr. Money Mustache’s popular post, “The Shockingly Simple Math Behind Early Retirement“, if you live on 50% of your current income, you could retire in 17 years. Sounds pretty great, huh? Well it could be even better.

  • Live on just 40% of your income – retire in 12.5 years
  • Get down to 30% of your income, and you could retire in 8.5 years
  • Live on 20% of your income – retire in 5.5 years!

In other words, if you can live far below your means today and continue that lifestyle in the future, your retirement could be wayyy before your 65th birthday. Heck, you could retire by the time you’re 30!

“But Derek, how is this even possible? If I make $100,000 a year, you’re telling me that I’d have to figure out how to live on $20,000 if I wanted to retire in 5.5 years?”

Yup….nobody said retiring extremely early was going to be easy…

2) Pay Off All Your Debt (including your house)

This is the kicker. This is what makes or breaks almost everyone I know.


Those that have the nice car, the expensive house, and the big student loans – they’re the ones that don’t have any money left at the end of the month. It all goes out toward payments. The more debt someone has, the more difficult it is for them to make retiring extremely early possible.

BUT – for those that have no debt, living on less than you make could be pretty easy don’t you think? I mean think about it. What if you had:

  • No car payments,
  • No student loan payments,
  • Zero credit card debt, and
  • You paid your house off and got rid of that stickin mortgage

How much extra money would you have each month?? $1,500? $2,000? $2,500?

If you had absolutely no debt, I bet you could start living on half your income! Maybe even less! This is the first HUGE step toward retiring extremely early.

How do you do it? Check out this debt snowball tool. It’ll get you started on the right track, and it will help propel you toward debt freedom.

3) Invest in Non-Retirement Accounts

There’s quite a few financial professionals that tell people to “max-out your 401k and your Roth IRA every year”….and that’s good advice for those that plan on retiring at age 65. But what about those that want to retire at age 35, 45, or 55? Stashing all your money into retirement accounts makes it pretty tough to withdraw money without getting slammed in early-withdrawal penalties (typically 10% on top of the amount you’re getting taxed already).

Instead of tying all your money up in these traditional retirement accounts, why not hold some back and invest it on your own?

The simplest recommendation I have for this is: Wealthsimple – a brokerage that invests your money simply and effectively. So far my investments have risen quite well with them, and they gave me $50 just for signing up! At this point, it’s pretty hard for me not to recommend them.

If Wealthsimple doesn’t meet your needs, then I’d steer you toward Vanguard. It’s easy to start an account and your options for investing are endless. Plus, the fees are as low as you’ll find anywhere else!

If you want to make retiring extremely early a reality, then start to put some of your retirement money into your own investment accounts. This way, you can withdraw it whenever you like and never have to worry about getting penalized for it.

retiring extremely early4) Invest in Real Estate

Not too keen about having your entire net worth tied up in the stock market? (I don’t blame you). Then it might be time to start looking into real estate investing. This investment medium is popular with early retirees because:

  1. It provides a consistent cash flow
  2. The house continues to appreciate in value
  3. It’s a great tax shield for high income earners

And personally, I’ve discovered that the best way to invest in real estate is with cash.

  • You can typically buy at a discount
  • The purchase is incredibly easy (less paperwork, no bank hassles, quick closing)
  • No interest payments
  • HUGE cash flow with reduced tenant hassles

It might take a while to buy your first rental with cash, but after that it just gets easier and easier! Don’t believe me? Check this out — The Rental Property Wealth Calculator: Your Path to Millionaire Status.

5) Start Your Own Business

If you’re still over the moon about retiring extremely early (and you should be! It’s absolutely possible!!), then I’d also suggest that you develop some additional income with your own business. Not only will it produce extra income that could help you retire quicker, it might just become a business that you love and carry with you into retirement!

Here are some quick business ideas that can get you started:

  • Photography
  • Lawn care
  • House cleaning
  • Car detailing
  • Blogging
  • Pet sitting
  • Consulting

The list could really go on and on. Just consider these 3 things and you’ll soon have a business idea that you can run with!

  1. What product/service are people in need of?
  2. What is it that you enjoy doing?
  3. Can you charge a decent wage to deliver on it?

BOOM! There you have it! Start that business and retiring extremely early might get here sooner than you think!

retiring extremely early HSA6) Load Up Your HSA

One of the biggest fears of retiring early is forgoing quality medical insurance that one has through work. But, with the many options available for purchase in the open market and through the exchange, finding dependable insurance on your own isn’t really that tough anymore.

If it still weighs on you though, then I would recommend loading up your HSA (Health Savings Account) as much as possible to cover any future medical expenses. You can deposit pre-tax money, and if you use the fund for medical events you’ll never have to pay tax on it! It’s one of the few ways that you can legally dodge taxes today, so why not take advantage?

Related: 5 Things You Didn’t Know About a Health Savings Account

7) Stay Healthy

Even with the open market and the exchange, let’s be real, medical insurance can still be expensive. And, even more than that, procedures, operations, and medicine can weigh you down financially as well!

So how can you best protect your money?

Stay healthy!

Stay active, eat right, and do your best to keep your slender figure. By simply watching what you eat and making sure to exercise each day, you’re likely saving yourself thousands of dollars in the long run – maybe even more.

Related: 5 Reasons Why a Healthy Lifestyle Will Save You Money

8) Invest Into Your 401(k)

Yes, it’s true that the 401(k) regulations were drafted to penalize individuals for early retirement withdrawal (before 59.5 years old). And while I don’t recommend that people invest heavily into these funds, I still think it’s a nice compliment for those that plan on retiring extremely early.

I say this for two reasons:

  1. Many people will live long after 59.5 years old, so they can still use this money for 25+ years of their lives
  2. There is a loop-hole in the documentation that does enable early withdrawal

According to section 72(t)(2) of the 401(k) code, one can receive equal periodic payments without the penalty tax. In other words, if you beef up your retirement fund and decide to receive $1,000 a month for a long period of time, you likely won’t be penalized for your withdrawal. It’s the perfect set-up for the early retiree if you choose to go this route.

9) Redefine Your Retirement

You may have had dreams of retiring to the white sands of Fiji – possibly even with your personal butler. But…this dream is going to take 40 years of your working life to achieve…

What if, instead, you reduce your expenses by retiring to an apartment that’s just 2 minutes away from the beach…in Florida instead of Fiji? With this new budget item, you find that you can retire in just 15 years instead of 40!

Redefining your retirement might be worth it if you can dodge 2+ decades in the workforce, don’t you think?

Retiring Extremely Early – It’s Your Turn

There you have it. You’ve got the tools, you’ve got the instruction, and if you’re reading this article, you’ve probably got the income. Now all you have to do is commit!

Is retiring extremely early important to you? What will you do in your early retirement?

Battle of the Mind Investing Money


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. Staying healthy is too underrated. There’s no point in an early retirement if you’re not healthy. We plan to travel and give back to the community after we FIRE. 🙂

    • Totally agree. My wife and I love to stay fit and healthy. It’s not always easy, but we know it’s essential for a happy future – not just for us, but our entire family! At what age do you plan to retire??

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