- Retiring early is part of the dream for many Americans, but retiring by 45 or earlier takes discipline, rigorous saving, smart investing, and living frugally.
- Seven retirees who have successfully retired by 45 share advice, and suggest taking up side hustles, communicating with your partner, and expecting the unexpected to make it work.
- Visit Business Insider’s homepage for more stories.
With one-fifth of Americans now working well past age 65, there’s an argument that retirement is farther away than ever.
With many more embracing the FIRE, (Financially Independent, Retire Early) movement, it’s becoming increasingly common for workers to put their corporate lives behind them and retire early. But, it takes more than traditional retirement savings to make it happen.
Below, seven early retirees share their top tips for getting to early retirement, living out of their savings for years, and generating income when retired.
It’s not about stockpiling money — it’s about growing that money
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After retiring at 37, Chris Reining decided that it wasn’t all about rounding up as much cash as you can in a savings account — rather, he decided that he wanted to make his money grow.
"Maybe having a mountain of cash helps you sleep at night. That’s fine," he writes for Business Insider. "However, if the money was invested in the stock market where the average return for all 30-year periods is about 10%, a single $25,000 investment can grow to $400,000."
He cites opportunity costs as a big source of losses among those retiring young. He asks: "Doesn’t that difference of $375,000 seem like an enormous price to pay?"
Keep earning through a side hustle
When blogger and Business Insider contributor JP Livingston retired at 28 after a seven-year career in corporate finance, she decided that it wouldn’t necessarily mean that she couldn’t keep earning.
She put lots of time into her blog, and has ended up seeing big returns from it.
"It became a passive income stream sort of by accident. In its first full year it made $62,326 with only five hours of writing a week," she writes. While it’s not time-consuming, it does add significantly to her income.
Having this income has allowed her to have a little bit more flexibility and have an above-average retirement income.
Know that retiring early won’t solve all of your problems
Carl Jensen retired at 43, and has some regrets about the paths leading to that opportunity.
He found that by having a goal to retire, he got too pulled into the things he was doing to make money, as well as his job. He writes for GOBankingRates that while flipping houses built a good portion of the wealth that made it possible to retire, he found it exhausting and lost valuable time with family.
"It’s important to know that early retirement will likely solve some of your problems, but it probably won’t change your baseline level of happiness," he writes.
To him, retirement isn’t a problem-solver. "If you want to retire early because you’re running away from something, you’re doing it for the wrong reason," he says.
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