How to Retire Early? A 30 Step Checklist for Gaining Financial Freedom

4. Eliminate Debt

Debt weakens one of your most powerful wealth-building tools: your income. Payments toward debt reduce your cash flow. This cuts into the amount of money you have available to save and invest for or spend in retirement.

So, perhaps the most obvious early retirement tip is to get out of debt, and that starts with paying off high-interest credit cards.

Make a list of all debts, ordered from highest to lowest interest rate. Prioritize paying off the highest-rate debt first. Meanwhile, reduce your spending, so you don’t continue to add to your debt balances. Explore other ways to eliminate debt.

The sooner you stop overspending and start paying down existing debt, the sooner that money can be redirected to saving for retirement.

Need some inspiration? Document your finances in the Boldin Retirement Planner. Try out a scenario of eliminating your debt as soon as possible. You will immediately see the impact on your near and long-term finances and your possible retirement date.

5. Establish Passive Income Streams

Most early retirement advice focuses on saving more—but there’s a limit to how much you can cut or stash away. And the earlier you retire, the more years your savings need to cover—unless you have reliable income coming in.

The challenge? Most income involves work—and work is what you’re trying to escape.

That’s where passive income comes in. These are income streams that require minimal ongoing effort—money that flows in without you clocking in. Think rental income, royalties, dividends, or small business ventures that run with limited involvement.

Sound too good to be true? It doesn’t have to be. Explore 50+ passive income ideas to see how everything from real estate to creative side gigs could help fund your early retirement and give your savings a powerful assist.

6. Get a Handle on Your Current Spending

One of the most overlooked steps in learning how to retire early is understanding exactly how much you spend right now.

You might know the big stuff—your mortgage, car payment, groceries—but it’s the daily drip of smaller expenses that can quietly erode your financial freedom. If you want to retire early and stay retired, you need to track your spending with the precision of a GPS.

With Boldin, you can enter as much detail into your budget as you want—and project how your spending may change over time. If you prefer to look backward and track your actual expenses month by month, start with a free budgeting tool like YNAB to get a clear picture before planning forward.

7. Cut Expenses Now

If you want to retire early, you might need to make some short- and long-term sacrifices. Dramatically cutting expenses benefits you in several ways:

• It frees up more money to pay down debt and set aside for savings
• It conditions you to live on less money — which will come in handy when you lose earnings in retirement
• It reduces the amount of money you require to live on, thus lowering the amount you need to save (the “slingshot effect”)

Relentlessly look for ways to cut costs, like spending on subscriptions you don’t use, services you don’t need, dining out, expensive entertainment, or even your utility bills — wear a sweater or take shorter showers.

In addition to cutting small expenses, get in the habit of periodically shopping around on larger expenses such as home repairs, car insurance, and cell phone plans.

Explore 22 ways to cut expenses and save big.

8. Shift Your Mindset on Spending

You can learn to be thrifty, even if frugality is not your nature.

However, if you are having a hard time reducing your spending, you might want to shift your mindset.

• Don’t think about saving as depriving yourself.
• Instead, turn the sacrifice into a benefit. Consider saving money as empowering yourself to control when you retire and how well you’ll live afterward. It is about what you are gaining, not about what you are losing.
• Think of it this way: You are buying your freedom with every single dollar you stash away.

9. Translate Your Spending into the Equivalent Early Retirement Time

Some people pursuing early retirement love the challenge of cutting costs wherever they can. Others hesitate—especially when it comes to small indulgences that make daily life more enjoyable.

If you’re on the fence about cutting back, try this powerful mindset shift: translate your spending into the time it’s costing you in early retirement.

Take the classic coffee example. A daily fast-food brew may only cost $2, but over a year, that adds up to about $500. Prefer a $5 specialty coffee? That’s closer to $1,500 annually.

Now here’s the key question: What does $1,500 mean in terms of your retirement timeline? Depending on your future budget, it could represent an entire week—or more—of financial freedom.

So, what’s worth more to you: one more week of early retirement, or 300 iced vanilla lattes? There’s no wrong answer—but the choice becomes a lot clearer when you see spending in terms of time, not just dollars.

10. Know the Rules for Being Able to Tap Retirement Savings Early

One big challenge for figuring out how to fund an early retirement is how to tap into retirement savings. One problem is that most of the retirement savings vehicles — namely traditional 401(k)s and IRAs — enforce a 10% penalty for any withdrawals made before 59.5.

If you have adequate savings, you might consider these 5 ways of withdrawing those funds early, without penalty.

11. Create Your Long-Term Retirement Budget

This early retirement tip requires you to look into your future. Thinking carefully about what you will need and want to spend when you are retired can possibly help you get there earlier.

After all, the less you need to spend in the future, the fewer savings you will actually need to retire.

Use the Boldin Planner to set different levels of spending for different time periods. You can even budget for big, one-time expenses like vacations. The system helps walk you through a budgeting process in over 75 different categories.

Varying your expense levels as your activity levels and interests evolve can give you a more accurate projection of how much savings you will really require.

16. Dramatically Reduce What You Spend on Housing

Housing costs are usually, by far, the single biggest expenditure for any household. Reducing what you spend on your home can go a long way toward helping you achieve an early retirement.

Conventional advice is to keep housing costs at no more than 30% of your income, if you want to retire early, you should aim as low as 15 to 20%. That may mean moving to a more affordable city and avoiding homes that are large and high-maintenance.

Downsizing, refinancing your mortgage, or getting a reverse mortgage (if you want to stay put) are options for eliminating or reducing your housing costs and even releasing equity to use for your retirement expenses.

17. Go Smaller — Even Tiny!

Maybe you need a 4-bedroom house with three baths, a 3-car garage, and, of course, a gazebo. Can’t forget the gazebo. But then again, maybe you don’t.

If your home is more than you need, selling it and scaling down could dramatically reduce your living expenses and help you add more to retirement savings.

Some retirees are even embracing the tiny home trend.

18. Want an Early Retirement? Plan for Retirement Abroad

If you are adventurous, maybe the best early retirement tip is to consider moving abroad.

Living in some foreign countries can dramatically reduce your expenses and therefore the amount of savings you need for a secure retirement.

Here are 12 tips for how to retire abroad.

19. Keep Increasing Your Savings Rate

Every time you cut an expense, get a bonus, or free up money in your budget one way or another, make sure that money is redirected to either:

• Paying down debt
• Saving for retirement

Experiment with different savings rates using the Boldin Planner.

20. Plan for a Retirement Job

For many early retirees, retirement isn’t really about never working again. It is about having time and freedom to pursue hobbies, start a business, or travel.

The right retirement job can provide an income stream and maybe even the opportunity to do what you want to do. Can you get paid for what you are passionate about?

Part-time employment is another option and it isn’t just fast food and retail jobs. Many websites have popped up in the past few years offering to connect experienced professionals to part-time and flexible jobs. Check out Flexjobs.com, RetirementJobs.com, and Indeed.com for work that matches your skillset and interest.

In your talks with potential employers, make it clear exactly what you are after. Be upfront that you are in the market for part-time or flexible work. While you might have concerns that this level of honesty will harm your chances of getting hired, it can actually help you.

Employers may be reassured that you’re not just looking for a job to hold you over until something better comes along. They may also like the idea of getting someone with your experience at a lower rate since you’ll be working fewer hours.

Another option? Start your own business and work on your own terms.

21. Retire Early . . . But Only Temporarily

For a long time, the “norm” was working for 40+ years, then taking the time to enjoy yourself. But with more people working well into retirement age, why not find a way to inject bursts of freedom and fun into your career path?

Consider taking a sabbatical or a career break for a few months or a year. Some companies provide formal sabbatical programs for employees, meaning the time off may be paid or unpaid, but the employee will have a job to return to. Other employers don’t offer formal sabbatical programs.

You may be able to request an unpaid leave of absence to travel or just try out the work-free world for a while.

Pick a date and duration for your break. Don’t just think about “someday.” Make it concrete. Then start planning your finances: paying off debt, reducing expenses, and planning for covering expenses while you’re on your break.

Next, figure out what you want to do with this time. Do you want to travel, volunteer, try a new career, write a novel, or work on projects around the house that you started but never had time to finish?

Don’t take a career break without a plan for spending your time. Doing nothing for several months will likely just lead to boredom and depression.

22. Don’t Assume that an Early Retirement Means Starting Social Security Early

Many people think that starting Social Security as early as possible is a good way to achieve an early retirement.

However, while you get a boost in income when you start Social Security, the earlier you start, the lower your monthly benefit amount will be (for life).

The lower benefit amount usually means that you will earn less money over your lifetime if you start early rather than waiting.

Try different start ages in the Boldin Retirement Planner to see the impact on your finances.

23. Earned an Income Bump? Increase Your Savings Rate (Not Your Spending)

Getting a raise might be one of the most satisfying experiences. You work hard, and a bump up in pay shows that the company really notices and appreciates your efforts.

But what if you hadn’t gotten the raise? Would you suddenly be financially destitute? Probably not.

Every time you receive a raise, increase your contribution percentage. It might help to reset how you think about raises. Can you transform your thinking to believe that the raise is really intended to help you in the future, not now?

If you genuinely need more money now, can you at least devote a percentage of the raise to retirement savings?

24. Make Savings Automated

There are different approaches to how to save for retirement.

• Some people don’t think too much about saving — they just hope it happens. This type of saver might deposit their paychecks and hope that something is leftover as savings.
• Some people consciously deposit money into dedicated retirement savings accounts.
• Others automate the process. They deduct savings from their paycheck and automatically add them to existing investments.

So, which is the best way to save for an earlier retirement? Automating your savings is proven to be the most effective way to ensure that you actually save. You don’t have to think about it, it just happens — no hassle, no excuses.

Your human resources department or your bank can help you set up an automated system.

25. Shift Payments to Savings Once a Bill is Gone

Is there anything more exciting than paying off a bill? Maybe it’s a car, or maybe it’s a credit card. Whatever you’ve buckled down and paid in full, shift that payment amount into savings before you grow accustomed to having it available to spend.

Jack Coleman for Daily Finance calls it the lifestyle creep. You got along just fine while paying off the debt.

You’ll get along just fine without adding the amount back into your usable income once it’s paid off.

Some payments can make a huge difference.

If you’re paying a few hundred dollars monthly for a vehicle, your retirement savings will jump nicely every month once you’ve redirected that amount into your future.

26. Save More When the Kids Fly the Coop!

If you have kids, I don’t need to remind you that they are big expenses!

No matter if you are happy or sad about the empty nest, all of us should definitely use this as an opportunity to save more for retirement.

With fewer mouths to feed, a newly empty nest is a great time to increase the amount of money you contribute to your retirement savings. (After college costs are taken care of.)

27. Getting a Tax Refund? Put it Into Your Retirement Savings

If you are lucky enough to get a tax refund, this is an excellent opportunity to boost your retirement savings.

Sure, there is lots you could spend the money on, but why not invest in your future security and happiness?

28. Pay Attention to Taxes

Taxes can add or subtract thousands from your bottom line each year. Reducing your tax expense can enable you to save more for an early retirement.

And, planning your future taxes carefully now for after you retire can help you feel more secure.

While not perfect, the Boldin Retirement Planner attempts to at least calculate a credible estimate for what you will pay in taxes each year in the future. It is a sophisticated system.

A few quick early-retirement tax tips:

• Living in a state with a high tax rate (looking at you, California)? Consider relocation to a state with a low tax rate — especially once you retire.
• When it comes time to take withdrawals from your retirement savings accounts, monitor your tax bracket very carefully
• Be careful to take mandatory withdrawals after age 72 and be careful about early withdrawals.

Get more info about minimizing taxes on your retirement accounts and the best states for taxes.

29. Know How to Turn Savings into Income

A lot of the planning for an early retirement involves saving and investing. However, when you retire, it is time to turn those assets into income.

This can be challenging. Not only is it psychologically difficult to switch from saving to spending, but it is also just plain difficult to know how to invest and withdraw savings efficiently to last your lifetime — no matter how long that turns out to be.

Luckily you have options. Here are 18 retirement income strategies. Find what works best for you.

30. Take Advantage of Catch-Up Retirement Savings

Once you have figured out the best way to cut your current expenses, you will be better able to start taking advantage of catch-up retirement savings. Catch-up contributions are the IRS’s way of making it easier for savers age 50 and up to tuck away enough retirement savings.

You probably already know that there’s a limit to how much you’re allowed to save in tax-advantaged retirement account such as IRAs and 401(k)s.

Well, once you reach age 50, you’re allowed to make additional “catch up” contributions over and above those annual contribution limits.

Learn more about the limits on catch-up retirement savings.

Find Your Path to the Early Retirement You Want

Use the Boldin Retirement Planner to take control of your money. This easy-to-use platform can help you achieve your dreamed-of future — be it tomorrow, next month, or twenty years down the road — and successfully balance your everyday priorities with your someday possibilities.

Get Started Now…

Updated June 6, 2025