Can You Really Retire Early on a Middle Class Income? Joe Udo Did — Here’s How
Written by
Laura Bogart
Edited by
Kristen Mae
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These days, you wouldn’t be blamed for thinking you have to be a millionaire to retire comfortably. Headline after headline proclaims that Americans of all ages are increasingly anxious about not having enough to retire. Not Joe Udo.
Author of the popular Retire by 40 blog, Udo, a former computer engineer, did just that. At age 38, he signed out for the last time to focus on a bold and exciting new venture: becoming a stay-at-home dad to his then 15-month-old son.
However, he wasn’t content to rest on his laurels. Udo started writing his blog and sharing his expertise with other publications. His goal? To give other people the knowledge to also retire before they reached the big 4-0.
But even if you’re, ahem, well over 40, his insights are still very applicable. They can help you retire sooner rather than later — and on a middle-class income.
Find Financial Experts with a Path You Can Follow
The first step in Udo’s journey toward retirement was finding the FIRE (financial independence, retire early) movement. Inspired by the book “Your Money or Your Life” by Vicki Robin and Joe Dominguez, FIRE encourages a lean and purposeful approach to spending: evaluate every expense in terms of how many working hours you will need to pay for it.
That mindset can tighten your spending quickly. Under the FIRE framework, you calculate a “FIRE number,” which is roughly 25 times your annual expenses. This number represents the amount you’ll need to retire comfortably. To achieve it, FIRE devotees aim to save about 75% of their yearly income by aggressively cutting unnecessary spending.
FIRE proponents like Udo also advocate covering their living expenses by withdrawing only 3-4% annually from their savings, adjusted for inflation. Desperately unhappy in his engineering job, Udo embraced FIRE as a guidebook to financial freedom.
Focus on Passive Income
Though Udo had been meticulous about saving even before discovering FIRE — watching his immigrant parents scrimp and save in menial jobs had instilled in him a strong savings ethic — he also knew he needed passive income to sustain his lifestyle as a stay-at-home dad.
Beyond building his personal brand through his blog, he has also gotten involved in real estate crowdfunding. In a blog post about his family’s successes with this investment strategy, he wrote about finding value in equity-related projects and platforms like Crowdstreet, which connect investors with real estate opportunities.
Start Investing as Early as Possible
Investing early and strategically played a pivotal role in Udo’s ability to retire early. In a Forbes article highlighting his rise as a financial expert, Udo shared how he adjusted his portfolio before retiring to ensure he would have income available without tapping into his retirement accounts prematurely. He shifted his brokerage account toward dividend-focused stocks, enabling him to receive regular cash payouts.
To say that Udo is happy with his investment strategy would be an understatement. In one blog post about dividend stocks, he exclaimed, “I love our dividend stock portfolio!”
Dividend stocks appeal to Udo because they tend to be less volatile while serving as a source of relatively predictable income. They’re also ideal for long-term investment goals, offering a way to generate steady returns over time.
Retirement doesn’t have to be a millionaire’s game — or even a senior citizen’s game. Not if you follow the example of Joe Udo. He embraced FIRE principles, found a way to generate passive income, and invested strategically, ultimately growing enough wealth to retire comfortably in his 40s.
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