It is the dream of nearly everyone to be able to retire early. Who wouldn’t want more time to pursue what they love after an early retirement? Feel free to use these tips to make the dream a reality.

Work for the Government

One of the fastest ways to get to early retirement is by working for the government. Federal government employees are usually eligible for retirement after 30 years of service or early retirement after just 20 years. Retiring early usually will result in a slight deduction in retirement benefits but it frees your time. Federal employees can apply to go on early retirement or may be offered early retirement by their governmental agency.

State government employees like teachers usually receive a pension after 30-35 years of service or when their age plus their years of service equal a certain number. My husband is a Texas teacher and is eligible when his age plus years of service equal 80, so he can retire when he is 51-52 since he started working the year after college.

Reduce your Expenses

You can move up your retirement date just by eliminating some of your expenses. Since most people work just to pay their bills, eliminating your bills will give you more income to use. Paying off the home, cars, and credit cards is a great way to reduce the amount of money that you need to have coming in on a monthly basis. You could also downsize and move to a smaller home or an apartment that will cost less on a monthly basis.

Increase your Savings Rate

If you notice that you are well behind in the amount of money that you will need to retire early, then you need to step up the rate at which you are saving. You can start contributing every spare dime that you have to your retirement goal. This means making sure you are maxing out your company match in available 401(k)’s and looking into alternative savings options like a Roth IRA. You may even be able to add more money to your plans via catch up provisions.

My husband and I are attempting to live on our lowest income source and save the larger one. This means we are living on his salary as a school librarian and saving my self-employment income. We invest some by maxing out each of our Roth IRA’s, save some as cash, and invest the rest in stocks and mutual funds. We are on track to retire by 52 as planned.

Take your Benefits Early

Stepping up the age that you take your benefits will make retirement come a whole lot sooner. You might get less money from your retirement plan and federal benefits, so it is a trade-off. You can start taking distributions from Social Security at the age of 62 and can tap into most retirement plans at 59 ½.

If my husband wants to nudge up his retirement age, he has the ability to purchase years of service by cashing in 50 personal days that he saves up and paying a certain amount of money that is determined by a variety of factors – in his case, it would be about $20,000. We don’t think we’ll be taking advantage of that.

Can you think of any other ways to achieve early retirement?



Crystal Stemberger uses Budgeting in the Fun Stuff to write about finding the balance between paying your bills, saving for your future, and budgeting in the fun stuff along the way.