Jul 5, 2025
Think retiring early is out of reach because you don’t make a six-figure salary? It takes careful planning and discipline, but it is still possible.
About 60% of American retirees entered their golden years before they turned 65, with a median retirement age of 62, according to the 2025 EBRI/Greenwald Research Retirement Confidence Survey.
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Still, only one in 10 American retirees retired before they were 55 and about a quarter before they were 60. If you want to join that cohort but don’t have a high income, you’ll need to make some smart money moves (and a few sacrifices).
In general, retiring early means spending less, saving more, investing wisely and finding ways to reduce your living expenses in retirement. We all know this, but what are some practical steps you can take today to get on the road to retiring early?
1. Work with a financial advisor
Industry studies have shown that professional financial advice can add up to 5.1% to portfolio returns. But advisors can also help you navigate complex topics such as tax efficiency, retirement withdrawal timing and choosing suitable investments for your goals and risk tolerance. And they can help you stay on track and adjust your plan if necessary.
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2. Make two budgets
Budgeting may seem too boring to be ‘savvy,’ but it’s a key financial tool. A budget can help you understand your current finances, rein in your spending and shape your financial plan. Tracking your expenditures against your budget can even reveal new possibilities for saving.
But you’ll need two budgets. After tracking your current budget for a few months, you can use it to estimate your retirement budget (what you’ll need to live off once you’re retired). This will help determine how much you’ll need to save to retire early. You’ll want to review this retirement budget periodically and make adjustments as needed.
3. Automate your savings
To retire early, you may need to save more than the 15% that’s often suggested. If you want to join the Financial Independence and Retire Early (FIRE) movement and retire in your 30s or 40s, you may need to save up to 75% of your income.
Whichever retirement age you’re aiming for, you’ll need discipline to reach your savings goals — and one way to maintain that discipline is to automate your savings. An easy way to do this is to make 401(k) contributions directly from your paycheck, but you can also set up direct deposit into a high interest savings or investment account.
There are several apps that can help you automate your savings, including some that will round up your purchases and put the difference in a savings or investment account. Remember to increase your automated amount if you get a raise.
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And if you cut out a regular expense such as a subscription or membership to save money, add this amount to your automated payments.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
4. Manage your debt
It will be difficult to retire early if you’re carrying a large balance on a credit card or other high-interest debt. The savviest move is to not carry a balance — but life happens, so if you do have a balance, paying it down should be your No. 1 financial priority (along with building an emergency fund).
Paying down a credit card with a 20% interest rate delivers an immediate 20% return, so it might make it easier to do if you think of it as investing.
While you want to pay off high-interest debt as quickly as possible, you might want to consult with your advisor before accelerating your mortgage payments. If your mortgage rate is lower than your expected investment return, you may want to invest the money instead, but this decision will depend on your circumstances and preferences.
5. Maximize your biggest asset
Your biggest asset is likely your stream of future earnings, so to retire early you’ll want to maximize this asset.
While you could consider a side hustle or second job, look first at your current job and evaluate whether your time and energy might be better spent on developing your career to increase your future income stream. Consider whether you could make more from extra sales, a raise or a promotion — or if it makes more sense to take on a side gig.
Retiring early takes planning and dedication — but not necessarily a six-figure income.
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Vawn Himmelsbach is a veteran journalist who has been covering tech, business, finance and travel for the past three decades. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, Metro News, Canadian Geographic, Zoomer, CAA Magazine, Travelweek, Explore Magazine, Flare and Consumer Reports, to name a few.
