Early retirement is a popular subject nowadays. Entire blogs are dedicated to the topic, and books like Your Money or Your Life and Early Retirement Extreme are jumping off the shelves. There’s even an online movement dedicated to early retirement, known as the Financial Independence, Retire Early (FIRE) movement, and it’s burning up the internet with hundreds of blogs focused on the subject, not to mention a rapidly increasing amount of discussion in mainstream media.
With all this attention on packing up your work-life early and jumping into a pre-age-65 retirement, let’s take a closer look at some of the facts, and some tips to get you there.
A sizable percentage of Americans say they have virtually no money in savings and investments. For anyone looking ahead toward retirement, that’s not a very comforting statistic. If the idea of early retirement is appealing to you but you have no savings or investments, you have some work to do.
You should know the exact amount needed every year to live comfortably. That means income from savings and retirement portfolios that generate retirement income. And on Paula Pant’s Afford Anything Podcast, Suze Orman noted that “You need at least $5 million or $6 million…You might need $10 million,” to retire early. She went on to say “You will get burned if you play with FIRE.”
Conventional wisdom states that in retirement you should be able to live on 80% of your pre-retirement income.  But that presupposes that you retire at age 65 or thereabouts. Of course, that number may vary based on your plans for retirement and how you’d spend your time.
The less you need to spend, the more you save. In a study, people were asked if it were possible to save $25 per week. The results were interesting. 13% would give up soft drinks or snacks from vending machines. 12% said they’d give up movies, etc. 11% thought they could go without specialty coffee purchases, while 8% would do without lottery tickets.  * It might be remarked here that if your early retirement strategy is buying lottery tickets, then your likelihood of actually achieving that goal is pretty close to zero.
There are many ways to lower your cost of living and transfer those savings into your retirement plans. After a week, it is doubtful that you’d miss your expensive designer cup of coffee, but you could save around $1600 per year. 
Whether you consolidate your credit cards or transfer balances to zero percent accounts, getting out of debt is essential too. And as far as investments go, a sensible middle ground of investing is the best approach. Be conservative in the projection of your anticipated rate of return on your investments. An unrealistic expectation of return could tempt you to save too little under the misguided assumption that you’ll make it up in returns.
If the goal is early retirement, then there are some things to consider. What exactly is early? And how would you define financial independence? Ultimately, if balancing the equation that ends with passive income > future expenses and a lifestyle in which work becomes optional all before the traditional (or projected) retirement age, then the takeaway is to be smart with your strategies, tighten up expenses, and put the pedal to the metal on your plans.
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