Best Early Retirement Tips For Millennials

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Now that we’re officially debt-free (besides our mortgage) we’re on a FIRE (financial independence retire early) path. In the past 16 months we’ve paid off $62,000 and I alone paid off $40,000 before marrying my husband. So in total, we’ve paid off $102,000 of debt.

Being debt-free is so freeing and we’re more motivated than ever to achieve financial independence. Our new goal is to retire in less than ten years and I know we can do it.

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What is financial independence?

Financial independence means something different for everyone. For us, it means being able to live the life we want without having to work. It’s basically work optional. We can work if we want to but there are no obligations.

What does FIRE mean?

FIRE stands for financial independence, retire early. Many people are moving toward FIRE because they want to take control of their daily life and live a life of freedom. People doing FIRE typically live way below their means and invest a large portion of their income.

How to reach FIRE as soon as possible

My husband and I have a huge goal of reaching FIRE as soon as possible or in the next ten years. With our current plan, we will get there. This is what we’re doing to reach FIRE.

Max out contributions on 401k

Husband has a 401(k) through work with a match so the current 401k limit of $20,500 is maxed out.

Max out contributions on IRA

We are both maxing out an IRA which is currently $6,000 for each of us, so $12,000 total. 

Max out contributions on HSA

The 2022 annual limit on HSA contributions is $3,600 for self-only and $7,200 for family coverage. We are married so my husband is contributing $7,200 a year and his work matches a percentage of his contributions.

Took an investing course

Neither of us were taught how to invest, but luckily we found a great course called Build Wealth by Investing In Index Funds. This affordable course taught both of us how to invest in a way that wasn’t stuffy, boring, or overcomplicated.

Key info inside the course:

  • Chapter 1: Compound Growth
  • Chapter 2: Stocks & Bonds
  • Chapter 3: Mutual Funds, Index Funds, and ETFs
  • Chapter 4: Asset Allocation
  • Chapter 5: Taxes and Types of Accounts
  • Chapter 6: Putting it together
  • 8 hours of content
  • Beginner friendly
  • Self paced videos and exercises
  • $79 for lifetime access

I also recommend checking out@personalfinanceclub’s Investment Growth Calculator to see how your investments will grow over time.

Any leftover money goes to a brokerage account 

Once we hit the limits for the 401(k), IRA, and HSA, we move on to investing in a brokerage account which is via Vanguard.

All bonuses and raises go to investing

Husband gets an annual bonus and raise and all of this goes toward investing.

Pay off debt

One of the key things we did to get closer to FIRE is paying off all consumer debt, car loan debt, and student loan debt. We are not debt-free besides our mortgage which is a loan at 3.25%.

Cut unnecessary spending

We’ve gotten our budget down to what is realistic for us while still enjoying our lives. However, we’ve done a few things to save even more money.

  • Cut unnecessary subscriptions like HBO Max and Disney+.
  • Drastically lowered restaurant spending
  • Cheaper grocery bill and eating less food (we eat waaaay too much!)
  • Less service spending (not getting massages, hair done as much)

Stash savings in a HYSA

Our emergency fund is sitting in a high yield savings account currently earning 1.75% but as you all know this number fluncates a lot.

We keep our emergency fund in a HYSA because we want our money doing something and not just sitting in a regular bank account earning nothing. We are currently working on building a 6 month emergency fund.

Switch to a high paying career

Consider leaving your current job to move into a high paying remote job as a Salesforce Analyst. A Salesforce Analyst is someone who is trained to improve business processes with a technology called Salesforce.

Average starting salaries are in the $60,000-$80,000 range and once you have 3+ years experience, salary is $100,000+ a year for most people. You do not need a college degree to become a Salesforce Analyst and the online training is less than 6 months, with many people getting job offers while they are in training.

Most online training programs for this average out to cost about 1 Salesforce Analyst paycheck, so once you get hired on, your new income easily covers the certification program.

With a higher paying job, you can invest a lot more money. Learn more about becoming a Salesforce Professional with this Free 5-Day Challenge.

Find a way to earn passive income

Earning extra money is the fastest way to get closer to financial independence and it’s exactly what I’m working on to get there.

I’m currently working on a second website after having completed Niche Site Academy. Niche Site Academy is a course that taught me how to create a blog that will be successful as long as I do the work, which I am! The course is all about keyword research and Google SEO. Niche Site Academy even taught me how to find a niche that has low competition on Google but gets a lot of traffic. Basically, the course set me up for success instead of picking a random niche that I don’t even know will get any page views. I’m already getting Google organic traffic which is insane because I just launched my blog a few months ago. 

One side hustle that I know is super successful for a few of my friends is selling printables on Etsy. This side hustle is incredible because you can make a few printables at once, list them on Etsy, do a little bit of marketing with the tips you learn inside the course, and earn passive income (making money while you sleep). I’ve seen people make $500 a week doing this which is huge for supplemental income if you’re on a FIRE journey. 

Take care of physical and mental health

One of the most important factors in our lives is taking care of our bodies. Since early retirement means we’ll have to fund our own healthcare, it’s important that we do what we can to avoid any unnecessary healthcare costs.

I go to yoga about 5 times a week and pay for a $99/month membership. This means I go to 20 classes a month which makes each class about $4.95. This membership is beneficial for both my mental and physical health so I think it’s worth the money.

How much do you need to retire early?

A standard equation people in the FIRE community use is this: annual expenses x 25-30.

If you’re willing to retire with less, you would use this equation: [annual expenses x 25].

If you want to be extra safe, you would use this equation: [annual expenses x 30].

We’ll probably go right in the middle and choose: [annual expenses x 27.5].

Related article: 10 Tips For Investing For Retirement

Our Story

  • 29 year old and 36 year old married couple with NO kids
  • We do not want kids and have taken the precautions to never have kids
  • Our one car is paid off
  • We both work from home
  • We have three dogs

Our current goals

  • We both want to retire in less than ten years.
  • We potentially want to pay off our house which dramatically cuts retirement expenses

*Our goals do not account for social security since we do not think that’s a possibility in the future for us.

Favorite FIRE books

Work Optional is one of my favorite early retirement books. This book teaches you how to make a financial plan for the rest of your life so you can retire on your timeline. Find out how to retire early and live the life you desire while also accounting for things like health care, children, and recessions. This book also lays out other options such as semi-retirement or career intermission if you simply want to take a break from working.

Work Optional: Retire Early the Non-Penny-Pinching Way

 

The Simple Path to Wealth is a book that really surprised me because I had no idea it was going to be so helpful. It’s one of my all-time favorite finance books and you must read it if you haven’t already. In this book, you’ll learn the following.

  • What to do if you have debt
  • Transforming your money mindset
  • Where traditional investing advice goes wrong and what actually works 
  • How the stock market works
  • Understand 401k, 403b, TSP, IRA, and Roth accounts, TRFs, HSAs, RMDs
  • What investment firm to use
  • Why you should be cautious when working with investment advisors (and whether you need one at all
  • The truth behind social security
  • The 4% rule of retirement 

The Simple Path to Wealth: Your Road map To Financial Independence

 

This is a book that is quite relatable when it comes to entering early adulthood and how many of us go into overspending instead of investing/saving. You learn a lot of key tips to start your FIRE journey and find a ton of inspiration and motivation along the way.

Playing with FIRE (Financial Independence Retire Early): How Far Would You Go for Financial Freedom?

 

Final thoughts

I know early retirement isn’t for everyone and many of you don’t even want to be on a FIRE journey. However, there may be a select few of you interested and if you’re reading this far, maybe you’re ready to start your FIRE journey. 

Here are the key takeaways for early retirement tips:

  • Contribute as much as you can to your 401(K), HSA, and IRA
  • Any leftover money goes to a brokerage account
  • Pay off all debt
  • Live frugally and cut out unnecessary spending
  • Put raises and bonuses directly to savings/investing
  • Stash savings/emergency fund in a HYSA
  • Find ways to side hustle and earn extra income
  • Take care of yourself mentally and physically to reduce healthcare costs in the future

That’s it! I hope you enjoyed reading my first FIRE post as there will be more to come.

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