Money Hacks To Help You Retire Early

I used to feel completely in the dark when it came to money. I didn’t know how to grow it, save it, or invest it wisely. That changed when a friend told me something that stuck: taking control of your finances means making short-term moves with your long-term goals in mind. For me, that goal is (and has always been) retiring at 45.

In a world where technology is evolving faster than our job security, especially with AI threatening so many industries, I want to be able to choose when and how I step away from work. But the truth is, women don’t always get that choice.

Women retire earlier than men, and some even retire earlier than planned. So, how do you step back without feeling overwhelmed or powerless?

We’ve got you simple and actionable money hacks to help you retire early without worry.

The United Nations Federal Credit Union (UNFCU) explains that the 50-30-20 budgeting rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.

But Cindy Kumar, a Chartered Professional Accountant and fractional CFO at Elevated Accounting flips it to help women get to retirement early.

“Allot 50% of your income to needs, 20% to wants, and 30% to building wealth (investing, saving for retirement, etc), she said. “Most people reverse this by spending 30% or more on wants.”

According to Cindy, this is simple and actionable.

“Track your monthly spending, calculate your post-tax income, allocate 50% to rent, groceries, bills; 20% to shopping, travel, fun, and 30% to business savings/investing account,” she said. “Automate your savings with apps and adjust and review monthly.”

Almost 40% of Americans have a side hustle today. To maximize your earnings, you can spend less time and earn more. Coaching, creating digital products, or consulting can amplify your income and fast-track your retirement.

“Traditional employment caps your income and time,” Cindy said. “A part-time business gives you a way to increase income and invest more aggressively in your 20s and 30s.” 

Cindy said she has seen clients double their retirement contributions because of side business profits.

“Identify your skillset or passion and launch a low-cost service or offer to begin with,” she said. “Track income and expenses and allocate at least 30–50% of profits directly toward long-term investing.”

People are worried about the economy and are planning to spend less on unnecessary things. But reducing this expenditure is difficult in the short term, even though the long-term benefits are huge.

Tiana Patillo, CFP, Financial Advisor Manager at Vanguard, believes that letting go of discretionary spending can save more for the long term.

“A good strategy to help you with discretionary spending is to wait a set period before you purchase anything above a pre-determined dollar amount,” she said. “It’ll give you time to carefully consider the purchase, its impact on your timeline, and ultimately teach delayed gratification.”

We’re living in a volatile economy, and having a set amount for retirement isn’t enough. Who knows how the future will unravel? More inflation, stock market drops, another pandemic, it’s essential to be flexible with your savings.

“Have a dynamic spending strategy to maintain your financial independence over the long term,” Tiana said. “This means you spend more when the market is doing well and less when it’s not.”

While there are several spending strategies, the “ceiling and floor” one helps you align your spending with inflation and market changes. 

“To keep your retirement income from big swings, set a spending ‘ceiling,’ the most you can spend, and a ‘floor,’ the least you can spend,” she said, Tiana. 

For example, if you want to withdraw $30,000 every year during your retirement, set a ceiling (maybe 20%). You can withdraw up to $36,000 when the economy is doing well. Similarly, you can set a floor at 15%. If it seems like the economy is taking a hit, you can choose to withdraw up to $25,500 that year.

“Our research shows that for a FIRE (financial independence, retire early) investor planning a 50-year retirement, using a dynamic spending strategy can increase the chances of a successful retirement from 56% to 90%,” Tiana said.