I Retired Early at 53: 6 Tips To Get There in 10 Years

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Early retirement is the dream for many, as it can be a time to soak up positive experiences and reduce stress. However, while the idea sounds appealing, retiring in your 50s (or sooner) usually requires careful planning and disciplined savings built up years in advance. Simply put, it’s not about luck alone; it’s about strategy.

GOBankingRates spoke to Kyle M., a former internal counsel for a tech company, about what enabled him to retire early. Kyle wasn’t planning on retiring at age 53, but a company downsizing with a solid layoff package made him rethink whether he wanted to keep working from that point forward. Having laid the necessary financial groundwork, he realized that it was possible.

Here are his six tips for an early retirement, and what it actually takes to reach financial independence sooner than you might think.

Tip No. 1: Diligently Track Expenses

When Kyle considered whether he and his wife could retire, he took a close look at their expenses “on an almost day-to-day basis,” he said. Then, they met with a financial advisor to get a better idea of how long their money could last.

They decided to sell their home to free up liquid cash, which was a decision Kyle struggled with at first — after all, this was where he and his wife had raised their two daughters and lived for over 17 years.

“It was really hard for me to sell the house at first, but now I look at it and think, we put all this money in the bank, we reduced our expenses by so much, and this allows us to do so much more.”

Tip No. 2: Resist Lifestyle Creep

While the timing for early retirement was partially dictated by his job circumstances, Kyle realized he had laid out all of the necessary financial blocks to make it possible. One of the things he and his wife had always done was avoid lifestyle creep.

“As I made more money, one thing we didn’t do was upsize the house […] or buy a Tesla,” he pointed out.

Tip No. 3: Diversify Income Streams

In his working years, Kyle always took advantage of employer-sponsored 401(k) plans, particularly with an employer match.

However, while having a 401(k) or other retirement account is a key part of a solid retirement strategy, Kyle warned, “All your savings can’t be in your 401(k) because you will not have access to it until, at the earliest, age 59.”

He recommended an additional savings account, such as a brokerage or high-yield savings account that keeps your funds liquid (but still earning) so that you can stave off having to take Social Security and accessing your 401(k) as long as possible.

Additionally, they had purchased an investment property years before that still provided a regular stream of rental income.

Tip No. 4: Make a Mindset Shift From Wealth Accumulation to Expense Management

Retiring early is about making “a mindset shift,” Kyle said, from “wealth accumulation to expense management.”

Part of that shift is looking at how you spend money and what you’re willing to trade off to prioritize your new life. For example, while having a solid retirement savings is obviously important, Kyle made the point that savings alone will not allow you to retire early — it’s your spending habits that make or break this possibility.

“You can have twenty million dollars, but if you’re spending a million dollars a month, you can’t retire. Or you could have two million, but if you spend a thousand dollars a month, you can retire.”

Additionally, he said, in retirement, your expenses may shift. For example, he and his wife are prioritizing travel now. They downsized to a small place with a low monthly housing payment so that they could increase the amount they put toward travel. He said having different priorities and different income streams makes him more intentional with their spending.

Tip No. 5: Let Go of What Doesn’t Matter

In the latter years of your life, Kyle said, it’s important to consider what really matters and what you really need. He and his wife moved into a 950-square-foot condo, and in the process of selling their home, got rid of more things than they kept.

Retirement, he said, should be a stage of life where time and meaning become more important than accumulating material possessions.

Tip No. 6: Affordable Healthcare Is Key

Of all the tips Kyle shared, he stressed the most important one in making an early retirement possible was finding affordable healthcare. Not yet of age to get on Medicare, and not able to qualify for the Affordable Care Act’s cheapest plans, Kyle and his wife began to look elsewhere — outside the U.S. — at countries with low healthcare costs and overall affordable living. They set their sights on Portugal, where they will be spending most of their time, and hopefully moving there.

“Right now our single biggest line item expense is healthcare — and it is by a factor of two,” Kyle said. “We do not have an expense that is close to what our healthcare expense is, and you have to address how you’re going to provide for that if you stay in the U.S.”

Ultimately, if you can retire early, you should, Kyle said.

“Nothing is promised, and you don’t know how much time you have left,” he concluded. “Today is the best I’m going to feel for the rest of my life, and this is as healthy as I’m going to be. If you can set yourself up to retire early, you should. Don’t be afraid of the tradeoffs.”

Caitlyn Moorhead contributed to the reporting for this article.

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