If you think you have to win the lottery or inherit a windfall to retire early, think again. Plenty of people manage to achieve financial independence at a young age through hard work, a high savings rate, frugal living, smart investing or a combination of savvy retirement strategies.
In fact, the 13 people profiled here retired well before their 60s. Several actually retired before they turned 40. Each took his or her own path, but there are similarities in the ways they all reached financial independence.
Read their stories to find out what it takes to retire early.
Imagine being able to retire before age 30. Most people are just starting out in their careers at that point, but Pauline Paquin left the 9-to-5 working life when she was just 29.
“What helped me achieve financial independence early is I got an early start in life,” said Paquin, the founder of the blog Reach Financial Independence. She had several jobs as a teen, kept hustling through college and graduated with $25,000 in savings that helped her buy her first rental property with cash.
“I realized early on that money buys freedom, and every time I would save $50, I would tell myself that’s a day I don’t need to work in the future,” she said. Now, Paquin has three rental properties that provide enough income to support her low-cost early retirement lifestyle in Guatemala.
Jim Wang left the workforce at 30 after selling his successful blog, Bargaineering. While Wang was working as a software engineer in the defense industry, he started blogging on the side for fun. However, that hobby turned into a profitable business. See if you’re financially ready to quit your job, like Wang was.
“I quit my job once Bargaineering was bringing in enough,” Wang said. “It had been for over a year, but I was still scared to make the leap.”
He left his software engineering job in 2008, then sold Bargaineering in 2010, invested the proceeds and “retired.” Wang now has a new blog, Wallet Hacks. It’s something he does for fun rather than to support himself financially, so he still considers himself retired.
Elizabeth Willard Thames
After working for 10 years in the nonprofit sector as a fundraiser and communications manager, Elizabeth Willard Thames retired at age 32. She and her husband, Nate, left their careers in Cambridge, Mass., and moved to 66 wooded acres in Vermont. Urban Boston has a lot higher living expenses than rural Vermont.
“For my husband and me, the key thing that helped us reach financial independence was having a clear goal for why we wanted to pursue a different lifestyle,” said Thames, author of “Meet the Frugalwoods: Achieving Financial Independence through Simple Living” and founder of the Frugalwoods blog.
“Articulating that we wanted to move to a homestead in the woods of Vermont and have greater control over our time motivated us to save money at a very high rate and embrace a simpler approach to living,” she said. “Knowing that we were working toward this more fulfilling lifestyle allowed us to let go of the desire to spend money and freed us up to focus only on our highest and best priorities.”
Being incredibly frugal helped Jillian Johnsrud retire at age 32 from a sales job and her husband, Adam, take an early medical retirement at 35 from the Army. “We never earned a lot of income, so we had to be really freaking scrappy and focused to get here,” said Johnsrun, who blogs about her financial freedom and frugal living at Montana Money Adventures.
She and her husband managed to save $100,000 by age 24 by stashing all of her earnings and living on just his $1,800 monthly paycheck from the Army. They continued to save, their investments grew thanks to compound interest, and they used some of that money to buy a rental property. Then with the income from that rental property, they bought another, Johnsrud said.
Monthly rental income of $1,250 and her husband’s monthly military retirement benefit of $1,450 is enough to support them in their early retirement — along with their five children — because they keep costs low. “We rarely buy stuff or feel a need to spend money to be happy,” she said.
Todd Tresidder knew before he even started working that he wanted to achieve financial independence to retire early, which he did at age 35. “My entire process was very conscious, methodical and planned,” he said. “I realized in college that if I wanted financial freedom that I would have to become an expert investor. I researched where investment expertise was concentrated — the hedge fund industry — and targeted my career aspirations there.”
Tresidder had several job offers, but took the lowest-paying job because it had the greatest upside potential, he said. He quickly rose through the ranks and became a partner at his hedge fund firm in a few years. But as his pay increased, he continued to live as he did in college and save 70 percent of his income.
“I then took those savings and invested them according to the investment strategies I developed as a researcher and presto — financial freedom,” Tresidder said. To stay busy and engaged in his retirement, Tresidder blogs about reaching financial independence at Financial Mentor.
Akaisha and Billy Kaderli
Akaisha and Billy Kaderli were 36 when they decided they wanted to retire early. Akaisha was running the restaurant the couple owned in Santa Cruz, Calif., and Billy was the vice president of investments with Dean Witter Reynolds. Their relationship was suffering because of their work schedules, so they set a savings goal of $500,000 and invested every penny they could over the next two years. By 1991, they reached their savings goal through investing and the sale of their restaurant and home and retired at the age of 38.
They were able to retire with less than $1 million at such a young age because they’ve been living outside the U.S. in countries where the cost of living is low. They try to keep their annual spending below $30,000. Because they only withdraw a small percentage of their savings each year, their money has continued to grow and they actually have more now than when they retired. They share their adventures on their blog, Retire Early Lifestyle.
Investing in real estate allowed Dustin Heiner to retire at the age of 37. In 2007, he used his life’s savings to buy his first rental property for cash. “Six months after I bought my first property, I refinanced it and pulled out 80 percent of the value to purchase another rental property,” Heiner said. “Four months after buying that property, I refinanced it and pulled out 80 percent to buy two more properties. After a little over a year, I had four properties that rented for $500 to $550 a month.”
He saved every penny of profit from those properties to buy more. After six years, he had enough passive income from his properties to replace the income from his job. But it took another three years to get the courage to quit. Heiner now has 28 properties that bring in more than $12,000 in rent a month and blogs about real estate investing at Master Passive Income.
For years, J.D. Roth sold corrugated packaging — such as shipping boxes — and hated it. He had always wanted to be a writer, so he created a blog about sensible personal finance called Get Rich Slowly. It became so popular and generated enough revenue that Roth was able to quit his day job and write full time. Blogging is a tried-and-true way to boost your income.
Ironically, Roth actually got rich quickly when he sold Get Rich Slowly in 2009 at the age of 40.
“While it’s true that I achieved financial independence through a windfall, I was well on my way even without that event,” Roth said. “If I hadn’t sold the site, the income I had from it would have allowed me to reach the same point within a few years. But I wanted to quit work. I wanted to ‘retire.'”
He didn’t stop working on the site and retire until 2012. But Roth jumped back into the world of work in October 2017 when he bought back Get Rich Slowly, “not because I needed the money, but because I wanted to feel useful, and I wanted something to do that gave me fulfillment,” he said.
Doug Nordman retired from the U.S. Navy’s submarine force in 2002 at the age of 41. Although his military service entitled him to a pension, it was his own savings that allowed him to retire early. “The key factor to our financial independence was a high savings rate,” said Nordman, who is the author of “The Military Guide to Financial Independence and Retirement” and founder of The Military Guide. See what jobs still come with a pension.
Nordman and his wife eliminated wasteful spending to invest at least 40 percent of their income annually in mutual funds between 1982 to 2001. In fact, many months they put more than 50 percent of the income in retirement savings. “We saved and invested for our own financial independence as if I wouldn’t earn a pension,” Nordman said. “The pension is great, but we have enough investments to be financially independent without it.”
Carl from 1500 Days
When figuring out how to retire early from his job as a software developer, Carl used the 4 percent rule to calculate how much he would need to save to make his dream a reality. The strategy assumes that if you can live off 4 percent of your investments in the first year of retirement, your savings should last 30 years if you continue to withdraw your money at the same rate. He estimated that his expenses would be $40,000 his first year in retirement, so he would need to save $1 million.
Carl, who blogs at 1500days.com and uses only his first name to protect his family’s privacy, already had $586,000 because he had been saving in a 401k since he first started working. To reach $1 million, he and his wife cut their spending and downsized to a smaller house so he could save 60 percent to 70 percent of his income. He reached his savings goal in three years, but didn’t work up the courage to quit until nearly a year later when he was 43. “I wasn’t happy at my job and didn’t need more money, so leaving was the right decision and I’m satisfied with where my life is now,” he said.
Carl’s Story: What It’s Really Like to Retire Early
Amy and Tim Rutherford
To retire early, Amy and Tim Rutherford changed their big-spending ways. “We used to be high spenders and cut $6,500 a month out of our budget,” Amy said. One of the biggest expenses they slashed was housing, by downsizing from a 6,000-square-foot home to a less-than-2,000-square-foot townhouse. See why downsizing can make sense from a financial standpoint.
The couple also saved all of Amy’s income and a portion of Tim’s, which helped them build a big enough nest egg to retire early. Amy retired from a sales position at 46, and Tim left his job selling telecommunications equipment at age 48. Now, they spend a lot of their time traveling and sharing frugal travel tips on their blog, GoWithLess.
John from ESI Money
John was able to retire at 52 by following a philosophy of earning, saving and investing. “If you do those things well, you can retire,” said John, who only uses his first name to protect his family’s privacy because he shares details about his finances on his blog ESI Money.
John had a high income while he worked. Before he retired, he was earning six figures as the chief marketing officer for a marketing services company. He saved 36 percent of his income by maximizing 401k contributions and stashing cash in an individual retirement account and brokerage accounts. The money he saved grew because it was invested in index funds, and he retired with more than $3 million in savings.
John also owns 14 rental units, which provide enough income along with ESI Money and his other blog, Rockstar Finance, to cover his expenses. “We really don’t have to touch our savings at all,” he said.
Click through to learn the surprising things about early retirement you need to know.