{"id":9587,"date":"2025-02-04T19:05:26","date_gmt":"2025-02-04T19:05:26","guid":{"rendered":"https:\/\/finderica.com\/?p=9587"},"modified":"2025-02-04T19:05:26","modified_gmt":"2025-02-04T19:05:26","slug":"how-to-retire-early-even-if-you-dont-make-6-figures","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=9587","title":{"rendered":"How to Retire Early Even If You Don\u2019t Make 6 Figures"},"content":{"rendered":"\n
\n

\"ScoreCard<\/p>\n

If you\u2019ve ever looked up \u201chow to retire early,\u201d you\u2019re not alone. If you\u2019re wondering how to retire early, but your income doesn\u2019t allow you to invest thousands of dollars a month, we\u2019ve got eight simple \u2014 though not necessarily easy \u2014 steps you can take.<\/span><\/p>\n

1. Write Down Your Goals for Retirement<\/h2>\n
\"Young
Getty Images
<\/figcaption><\/figure>\n

Before you start, figure out when and how you want to retire early. Create a projected annual budget for your first year in retirement. Then look at your current budget, and adjust your expenses to determine how much money you\u2019ll need to withdraw from your accounts that first year. It won\u2019t be 100% accurate, but it\u2019ll give you a goal to shoot for in your savings. Once you\u2019ve decided what you need every month, you can plug that into a retirement calculator to see how much you need to save every year and for how long. <\/p>\n

More From The SS:<\/strong> Looking for another money-saving life hack? These companies give you food and other products for free.<\/a><\/p>\n

2. Automate, Automate, Automate<\/h2>\n
\"Woman
Getty Images<\/figcaption><\/figure>\n

The easiest way to make monthly retirement contribitons is to automate them. Because you\u2019ve already figured out how much you need to have saved, you can figure out how much you\u2019ll need to contribute from each paycheck and set it up as an automatic transaction. Is that amount too big for you right now, start with an amount that seems a little uncomfortable and increase it by 1% a month until you get to your goal. You\u2019ll eventually get used to living without that money. <\/p>\n

More From The SS:<\/strong> Wrangle your budget with one of The SS\u2019s picks for the best budget apps for couples.<\/p>\n

3. Lower Your Living Expenses<\/h2>\n
\"Mature
Getty Images<\/figcaption><\/figure>\n

Depending on how you\u2019re living, your initial calculations may have said you need upwards of a $2 million nest egg to retire early. Want to know how to lower that number? Lower the amount you\u2019ll need to live on in retirement! Adopting a few lifestyle changes \u2014 like getting a roommate, buying an affordable used car, or cooking at home more \u2014 can make a bigger difference than a lot of little cost-cutting moves combined because they target the three largest expenses in your life.<\/span> And if you start cutting your expenses today, you\u2019ll free up money to invest. Double win.<\/span> <\/p>\n

More From The SS:<\/strong> Love to play on your phone? These 22 legit games play real money.<\/p>\n

4. Increase Your Income Now<\/h2>\n
\"Businessman
Getty Images<\/figcaption><\/figure>\n

You might\u2019ve cut every expense possible and you\u2019re still unable to see how to retire early. At that point, to increase your savings rate, you probably need to increase the amount of money coming in. If you\u2019re working with a lower income and you can\u2019t focus on investing now, you\u2019ll have to save significantly more over time to reach your goals. Ask for a raise or promotion now, spend a year doing a side hustle or find another way to help meet your goal as soon as possible. <\/p>\n

More From The SS:<\/strong> Looking for a side gig? These are The SS\u2019s top picks.<\/p>\n

5. Pay Off Debt<\/h2>\n
\"A
Getty Images<\/figcaption><\/figure>\n

Any kind of debt will eat away at your returns over time, but especially any debt with interest rates of 6% or more. Focus on paying these debts off above saving for retirement. There\u2019s also a huge benefit if you look at it from a different perspective. For debt with interest of 6%, for every dollar you pay to that debt, you are making 106%. That\u2019s because it frees up one whole dollar \u2014 100% \u2014 plus the 6% interest which would have been stacked on top of it. Removing as much debt as you can from yourself not only often feels better, it makes it far easier to retire early. <\/p>\n

More From The SS:<\/strong> Another money hack? Stop spending too much money on these five dumb things.<\/a><\/p>\n

6. Optimize Your Retirement Accounts<\/h2>\n
\"\"
Getty Images<\/figcaption><\/figure>\n

A lot of people think they need to optimize (or set up accounts for the greatest profitability) before they start investing for retirement.<\/span> If you want to retire early, focus on saving first, then learn what will make your savings work harder for you. When you\u2019re ready to start optimizing your portfolio, you\u2019ll find it\u2019s not as hard as you might think.<\/span> <\/p>\n

More From The SS:<\/strong> Want more money-saving tricks like this? Here are eight more you should try.<\/a><\/p>\n

7. Start a Business<\/h2>\n
\"Bike
Getty Images<\/figcaption><\/figure>\n

A lot of early retirees don\u2019t think about starting a business, but doing so serves two purposes. First, if you retire at 50 or 55, you\u2019ll want to stay active mentally and physically. Second, a business can help you retire earlier than planned. If you do it right, you can rely on extra income from your business (instead of investments) to be your retirement income. Whatever business you want to launch, start part time while you\u2019re still working full time so the business has time to grow, and you can invest money into it gradually. <\/p>\n

More From The SS:<\/strong> Need a budget? Here\u2019s how to make one, step-by-step.<\/p>\n

8. Do Your Best to Stay Healthy<\/h2>\n
\"Laughing
Getty Images<\/figcaption><\/figure>\n

A major factor when considering how to retire early is the cost of health care.<\/span> Medicare isn\u2019t available until age 65, so many early retirees have to consider non-subsidized health care. Premiums for family coverage without a government subsidy average a whopping $1,398 per month for an average $8,620 deductible. That can derail the best-made retirement plans. The leading causes of health-related death are heart disease, cancer and respiratory diseases. Exercising, avoiding smoking and seeing a doctor yearly for a physical and bloodwork will go a long way in cutting down your health care and life insurance costs over time.<\/span> <\/p>\n

More From The SS:<\/strong> Need some extra cash quick? Try one of these 50 ways to make extra money this month.<\/a><\/p>\n

Dive Deeper Into Early Retirement<\/h2>\n
\"Mother
Getty Images<\/figcaption><\/figure>\n

Finding additional income streams, making lifestyle changes and committing to better money habits aren\u2019t quick fixes, but working to save those extra dollars now can help put you on the path to retire early.<\/span> Think you\u2019ve got what it takes? Head over to The SS to dive deeper into early retirement factors like housing, health care and taxes to understand more on how you can adjust your lifestyle for just that. <\/p>\n

More From The SS:<\/strong> Here\u2019s how to start saving money, even if you don\u2019t have room in your budget.<\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n

\n
\n