Gallup reports that the average expected retirement age in the United States is 64, anything before that is considered retiring early.
There are several key strategies that help people retire early. Danetha Doe, founder of the website Money & Mimosas, shared several of them:
Start saving for retirement as soon as possible – those in their 20s and 30s should open and contribute to a retirement account, like a 401(k) or IRA.
Don’t despair over starting later in life – it is never too late to begin.
Think about what type of retirement lifestyle is desired – those who want to travel may need to save more while others may opt to move abroad to cheaper cost of living areas.
“The rule of thumb is to save ten times your current salary,” Doe said. “If you’re making $80,000 as an example as your annual salary, then the rule of thumb says to have $800,000 saved for retirement.”
One way Doe suggested to reach this goal is the “Financial Independence Retire Early,” or FIRE, method.
Investopedia has a step-by-step guide, but it essentially requires workers to either increase the amount of money they’re making or drastically cut expenses so there is more money to save for retirement.
“And you can increase your income by taking on a side hustle,” Doe suggested. “Or you can become a full-time entrepreneur at Money & Mimosas, we have a wealth of information about how to grow and scale your business and give folks tips on how you can increase your income in order to reach your retirement goal of retiring early.”
Doe said to keep in mind it’s an ambitious goal to retire early because there may be 20 or 30 more years of life after retirement, and funds must be available to cover expenses.