3 Things To Stop Doing Right Now if You Want To Retire Early
Written by 
Edited by 
Money Expert 
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Retiring early sounds like a dream, doesn’t it? All that time to travel, visit friends and family, or start a new hobby. But dreaming about it and making it a reality are two very different things. To retire early successfully, you need to embrace smart practices — which means cutting out the habits that hold you back.
But how do you know what to stop doing if you want to retire early? There’s a lot of advice out there.
If anyone knows how to separate unhelpful financial habits from the ones that actually accelerate wealth, it’s Marc Russell. The financial coach and founder of BetterWallet excels at cutting through online chatter with commonsense strategies. He has a clear-eyed take on what you should stop doing to fulfill your dream of early retirement.
As part of our Top 100 Money Experts series, GOBankingRates caught up with Russell to learn more about the habits to drop — and which attitudes to embrace — if you want to retire early.
3 Habits To Drop
1. Succumbing to Lifestyle Inflation
Russell describes building wealth as stacking the right habits — which means retiring early is about avoiding the wrong ones. To him, the leading bad habit — which he calls “the No. 1 enemy of early retirement” — isn’t a lack of income. It’s letting that income get sucked into things you don’t need.
In other words, keeping up with the Joneses could keep you from achieving early retirement. Russell breaks it down in terms of your financial independence, retire early (FIRE) number — or, roughly, the amount of money you spend every year multiplied by 25.
“Retiring early is tied directly to your annual spending. If your lifestyle costs $80,000 a year instead of $50,000, your FIRE number jumps from $1.25 million to $2 million,” he said. “That’s years of extra work, all because of lifestyle creep.”
If the siren call of the latest trend tempts you to open your wallet, Russell wants you to remember one simple truth: “Every extra dollar you spend today is another day you push back retirement.”
2. Chasing Individual Stocks
Another unfortunate error that holds people back from early retirement is getting hung up on finding the hottest stocks instead of embracing a more holistic approach to investing.
Russell reminds readers that even professional managers with research teams struggle to “beat the market.” So your odds of finding instant success by chasing the stock everyone on social media is hyping are slim.
“Broad market index funds give you diversified exposure and reliable growth,” he said. “Retiring early doesn’t happen by hitting home runs; it’s about getting on base every single month.”
Steady growth over time may not be as glamorous as sudden market success, but it’s far more practical — and achievable.
3. Leaving Things to Chance
Russell is concerned that too many people aren’t proactive about early retirement. They’re saving, but they don’t have a clearly defined strategy in place. Some imagine that one day they’ll open their savings account and magically see the right number.
Real life doesn’t work that way. If you’re not actively planning, monitoring your progress, and adjusting your approach, you’re putting yourself at a disadvantage.
“Retiring early is not an accident. You need to know your numbers, your savings rate, your FIRE number and how much your investments are compounding,” he said. “You can’t drift into early retirement; you have to plan your way into it.”
What To Do Instead
What does planning your way into early retirement look like? Instead of opting for flash-in-the-pan approaches, Russell favors a balanced strategy that emphasizes capturing “free money,” automating your growth and maximizing tax breaks.
1. Capture Your Employer Match
If your employer offers a 401(k) match, Russell urges you to contribute at least enough to get the full match — otherwise, you’re leaving free money on the table.
“Imagine you make $80,000 a year and your employer matches up to 5%. That’s $4,000 a year of free investing money,” he said. “Let that compound at 8% annually for 20 years and you’re looking at over $180,000. That’s the easiest ‘raise’ you’ll ever get.”
2. Automate 401(k) Contribution Increases
After securing the match, Russell recommends automating yearly increases to your 401(k) contributions. You’ll barely notice the change in your paycheck — but the long-term payoff is significant.
“Let’s say you start contributing 6% of your $60,000 salary. Each year you bump that by 1% until you’re at 10%,” he said. “In just a few years, you’ll be investing $6,000 a year instead of $3,600. That extra $2,400 annually, compounded over decades, could add six figures to your retirement account.”
3. Max Out Tax-Advantaged Accounts
With your 401(k) on autopilot, Russell recommends exploring additional tax-advantaged accounts — but be aware of eligibility rules.
“A traditional IRA lowers your taxable income today,” he said. “While a Roth IRA gives you tax-free growth if you qualify under the income limits.”
For those who are self-employed, there are additional options that allow higher contributions than traditional IRAs or employer 401(k)s.
“If you’re self-employed, Solo 401(k)s and SEP IRAs let you contribute far more than traditional limits, which can ‘superfund’ your retirement.”
4. Use a Brokerage Account for Flexibility
Russell notes that if you plan to retire before age 59½, you’ll need access to funds outside of traditional retirement accounts. A taxable brokerage account provides that flexibility.
“Retirement accounts are amazing, but they lock you out until 59½,” he said. “If you want to take money out before that age, you generally will need to pay a 10% penalty on the untaxed amount. If you want to stop working at 45 or 50, a taxable brokerage account is your lifeline.”
He describes a brokerage account as the bridge to your retirement accounts.
“Once you have these buckets working together, you can calculate your FIRE number — usually 25 times your annual expenses,” he said. “If you spend $60,000 a year, you’ll need about $1.5 million to live comfortably. That’s your roadmap.”
Don’t Overlook These Key Concepts
To retire early, there are two additional concepts Russell says you can’t ignore:
1. Your FIRE Number Comes From Your Annual Spending
To calculate your FIRE number, multiply your annual spending by 25. For instance, if you spend $50,000 a year, you need $1.25 million invested.
“Your spending is the steering wheel of your retirement timeline,” Russell said. “This is why it’s critical to budget and understand how much you spend every month.”
2. Compounding Is the Engine of Success
When it comes to building an early retirement nest egg, compounding is queen.
“Compounding is your best friend, and time is your most valuable asset,” Russell said.
He offers another example: If you invest $1,500 a month with an 8% return starting at age 25, that could grow to around $825,000 by age 45 — nearly half a million in growth on top of what you contributed.
“That growth is what makes early retirement feasible. Without compounding, you’re just drawing down your principal until it’s gone,” he said. “With compounding, your money keeps working even if you stop contributing.”
Bottom Line
To keep yourself on track toward early retirement, Russell advises avoiding common roadblocks like lifestyle inflation, stock chasing and wishful thinking. Retiring early takes hard work, smart planning and discipline.
“Retiring early means trading some spending today for more freedom tomorrow,” he said. “You’re not depriving yourself; you’re buying your time back.”
This article is part of GOBankingRates’ Top 100 Money Experts series, where we spotlight expert answers to the biggest financial questions Americans are asking. Have a question of your own? Share it on our hub — and you’ll be entered for a chance to win $500.
More From GoBankingRates
