10 Ways to Retire Earlier Than Friends on the Same Salary

The notion of early retirement is all the rage, with books and blogs devoted to the idea of quitting work while you are still young enough to enjoy life.

If you are not lucky enough to work for a company that provides a pension, self-funding an early retirement may seem daunting. But it can be done.

The key is to understand that the decisions you make are at least as important as the amount of money you earn. If you want to retire early — or at all — keep these suggestions in mind:

1. Marry or partner with the right person

Rido / Shutterstock.com
Rido / Shutterstock.com

A significant other can give you such a thrill, but love won’t pay the bills. Although it’s not unheard of for people to ask about credit scores on the first date, you probably shouldn’t push it quite that hard.

However, talking about other goals and money management habits can be fine fodder for those getting-to-know-you chats.

As the relationship heats up, you need to talk frankly about finances. If the object of your affections is vague about future plans or careless about spending, ask yourself whether you want to do all the heavy lifting when it comes to cash.

For more advice, check out “11 Essential Money Matters to Discuss Before Marriage.”

2. Don’t be in a rush to pair up

CASTALDOstudio.com / Shutterstock.com
CASTALDOstudio.com / Shutterstock.com

So what if all your friends from high school or college are getting engaged? That is no reason to rush into matrimony. Keep your eyes wide open with regard to financial as well as personal compatibility.

You want to pair with someone with whom you can share goals, and who is willing to do what it takes to achieve them.

Love makes it easy to overlook red flags such as careless spending patterns, high debt load and an inability to plan for the future. The old saying “Marry in haste, repent at leisure” has a lot of truth to it.

3. When you do pair up, stay that way

Monkey Business Images / Shutterstock.com
Monkey Business Images / Shutterstock.com

Many relationships have rough patches. Be prepared to work through them. Put bluntly, divorce is expensive as well as traumatic. It might also be unnecessary. Some problems that feel insurmountable can be overcome through couples counseling.

Unless your safety or your long-term financial well-being is at stake, remember why you married that person and work hard to work it out.

And if you do wind up splitting? Please, please read “10 Financial Moves That Keep You Sane During a Divorce.” What you learn could make the difference between solvency and despair.

4. Don’t have kids too early

Oksana Kuzmina / Shutterstock.com
Oksana Kuzmina / Shutterstock.com

An unplanned pregnancy can take a major toll on your finances, and even on your emotional well-being. That is especially true if it turns out that the person you thought was Mr. or Ms. Right is the wrong fit.

Even if you plan to wait to have children, remember that a surprise pregnancy is always a possibility. That’s another reason you need to be on the same financial page with your beloved. The more organized your finances are, the more likely you will be able to cope with an unplanned pregnancy.

5. Consider a smaller family

Billion Photos / Shutterstock.com
Billion Photos / Shutterstock.com

“How many kids should we have?” is a good question to discuss before you get married. Some people opt for only one or two children due to the high cost of raising them. Others keep their families small because they feel fulfilled and happy with producing only a couple of outstanding new citizens.

Remember, it isn’t just a question of whether you can feed and clothe more than one or two children. Family size can also affect:

  • Your mortgage. A two-bedroom starter home won’t be large enough for your version of “The Brady Bunch.”
  • Your car payment. You cannot tote five kids in a compact car.
  • Your retirement. If one parent takes a lot of time off to raise kids, he or she will likely put a lot less into both Social Security and any personal retirement program.

6. Be aware of the true cost of at-home parenthood

goodluz / Shutterstock.com
goodluz / Shutterstock.com

Some people feel strongly about having one parent — usually Mom — at home full time for years and years. According to personal finance expert Liz Weston, the average annual earnings for women who leave work for up to three years decline as much as 30 percent overall. In addition, these women may have trouble getting jobs if they stay out for too long.

While quitting a job might be the right choice, Weston emphasizes that you should not do so simply because child care costs too much.

“For a few years, those costs might eat up most or all of your paycheck, but such expenses decline over time,” she says. “If you continue to work, your earning power and retirement contributions will continue to grow.”

For tips on keeping as much of that paycheck as possible, see “10 Ways to Reduce Ridiculously High Child Care Costs.”

7. Live in a cheaper area

goodluz / Shutterstock.com
goodluz / Shutterstock.com

Sometimes you don’t have much of a choice about housing if your work is in New York or Los Angeles. But today isn’t necessarily forever; maybe you can find work in your field in a less-expensive area.

Look for ways to cut the cost of housing. You might move a little farther away from work, as long as the additional commuting expenses will not cost more than potential rent/mortgage savings.

Perhaps you can take in a roommate or two. Even married couples sometimes rent out a room to help ease mortgage costs.

8. Don’t keep up with the Joneses

Nejron Photo / Shutterstock.com
Nejron Photo / Shutterstock.com

Why should marketing experts determine how you live? Champagne tastes on a Kool-Aid budget will translate into debt that might keep you from ever retiring.

Put another way: The Joneses might be up to their hairlines in debt. Still want to be like them?

That’s especially true when it comes to cars. Maybe you want a sweet ride that leaves others in the dust — and makes them feel envious to boot. The higher cost of a luxury or sports car plus the higher cost of auto insurance will siphon tens of thousands of dollars from your wallet, and that’s money that could otherwise be growing in your retirement accounts.

9. Take calculated investment risks

Riccardo Piccinini / Shutterstock.com
Riccardo Piccinini / Shutterstock.com

Diversify your retirement investments. Stocks and real estate involve some risk, but over the course of decades they historically have returned more than safer savings accounts.

For more information, see “Why You’re Stressed About Your 401(k) – and How to Get Over It.”

10. Build an emergency fund

Rido / Shutterstock.com
Rido / Shutterstock.com

You need an emergency fund. Period. That cash will help you fix a car, replace a broken appliance or pay for a pet’s illness. And you will avoid putting those costs on a credit card or borrowing from your 401(k).

Feel that it’s all you can do right now just to fulfill current obligations? Get stealthy in your savings; “10 Ways to Save When You’re Making Minimum Wage” is a good place to start.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
10 Items Every First-Aid Kit Should Have
10 Items Every First-Aid Kit Should Have

Take control of your health and safety by customizing your own first-aid kit with these Amazon purchases.

5 Ways to Save at Dollar Tree
5 Ways to Save at Dollar Tree

Yes, it’s possible to pay less than a buck for items from a dollar store.

If My Spouse Dies, Can I Get Her Social Security?
If My Spouse Dies, Can I Get Her Social Security?

If a spouse dies, will the survivor collect the other’s share in addition to his or her own?

9 Houseplants That Remove Toxins From Your Indoor Air
9 Houseplants That Remove Toxins From Your Indoor Air

These plants may also do everything from reduce the amount of dust in your home to improve your productivity.

The Most Common Reason That Older Adults Fall Down
The Most Common Reason That Older Adults Fall Down

The good news: It’s possible to avoid potentially devastating falls.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

Longer Trips to These Stores May Raise COVID-19 Risk
Longer Trips to These Stores May Raise COVID-19 Risk

An airborne-disease expert recommends leaving this type of store within a half-hour.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

Taking a Multivitamin? Here’s Why You Should Reconsider
Taking a Multivitamin? Here’s Why You Should Reconsider

A new study has bad news for the millions of Americans who spend money on multivitamins.

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

Prepare to Pay More for These 31 Drugs in 2021
Prepare to Pay More for These 31 Drugs in 2021

More than 700 prescription medications have seen price hikes so far this year. Here’s a look at the worst.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

Where to Sell Your Stuff for Top Dollar
Where to Sell Your Stuff for Top Dollar

Here’s where to get the best price for all your clutter.

20 Amazon Purchases We Loved in 2020
20 Amazon Purchases We Loved in 2020

These practical products made everyday life a little easier last year — and will do so in the new year, too.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.