In this post we cover how to retire early with no money at 50 years old or younger!
Many people live their entire adult lives simply waiting to retire. They dream of the day when they can enjoy their time as they wish with no pressures from work, travel, pursue their hobbies and spend more time with their loved ones. Unfortunately, by the time they retire around the age of 60-70, they often find that they don’t quite have the energy and drive to do all the things they were planning on.
That’s why planning to retire early has become such a trend in the travel-loving community: it’s the perfect way to make sure you have all the time to pursue your dreams and passions while you’re still young and active!
But isn’t retiring early an option for a small and exclusive elite: those with generational wealth, CEOs with huge incomes, finance specialists? No! Retiring early is a lot more accessible than you think, and anyone with the right mindset can achieve that goal.
Mindset… and strategy. To retire early, you’ll need to be able to save up a lot of money in a short amount of time. And that’s something that needs to be planned with tried and tested methods. In this article, we explore the 6 essential steps to saving up for early retirement, and how you can implement them into your life. Enjoy this article on how to retire early with no money, at 50 years old or younger!
How to Retire Early at 50 Years Old Or Younger!
Is it possible to save enough money to retire before you’re 50?
Saving up enough money to retire before you turn 50 is easier than you think, but it stills requires a considerable sum!
There are a few different methods and algorithms to find out how much money you need to save up for retirement. Our favorite one is simple; it consists in multiplying your financial needs for a year by the number of years that you can expect to live after retirement.
So if you’re planning on retiring at 45 and living until you’re 90, you’ll need to save up $1.3 million to live on $30,000 a year, $2.2 million to live on $50 000 a year.
And if you’re particularly frugal and thrifty, you could manage to retire early with even less than $1 million in the bank!
Deciding how much money you need to save up for retirement is the first and most important step. Next, you’ll need to implement some strategies to make sure that you save up enough each month to work toward that goal. Here are our suggestions:
1. Keep your motivation
Saving enough money to retire by the age of 50 doesn’t have to be hard, but it does require consistency. Once you’ve decided how much money you want to save, convert that into a weekly or a yearly goal: how much money should you put aside to cover the cost of your early retirement?
At times, it will seem like saving such a large portion of your income each month is excessive. It might feel demotivating to see your friends and colleagues use their spending money on weekend trips and designer clothes when you are putting all of it toward your retirement fund.
But by reminding yourself of your goals regularly, you can avoid falling off the wagon. Don’t be afraid to use every motivation trick you can think of:
- visualize what you want to spend your retirement years doing
- read inspirational stories of people who retired early
- create a vision board
- … whatever helps to keep you motivated, make sure not to give up on your goals
Retiring early is a wonderful and eccentric idea. Some people won’t understand, others will try to talk you out of it. But make sure to focus on your own goals, your own desires, and not to let anything get in the way of your dream!
2. Save more money
The second step to retiring early is to make saving money a habit. At first, it will be hard to see such a large part of your income go toward a fund for a distant goal. But remember, your retirement goal is actually a lot less distant than that of your peers!
So make saving up something that you do with extreme regularity, every time you get paid. Ideally, you should be able to put money toward your retirement fund as soon as it reaches your account: it’s the best way to make sure you won’t be tempted to spend it.
If you’re not familiar with your options for saving toward retirement, it can be a good idea to schedule an appointment with your banker. They will be able to advise you on the best way to put money aside.
3. Have multiple income sources
Putting more money aside toward retirement each month is the first step… but that’s something you can only do if you have the money in the first place!
The truth is, an average salary won’t allow you to retire early unless you can lead an extremely frugal lifestyle.
For most people, it’s more realistic to get a second job, start a side-hustle or get into freelancing. Having multiple sources of income will allow you to make a bit more money each month, and it’s also a great way to avoid getting bored with what you do! So what should be your strategy for creating multiple sources of income? It all depends on what you’re good at!
Get a second job
Your first option is to get a second job, for example, a weekend or evening job. This will make sure that you get an extra source of income regularly, to go toward your retirement fund. What you want to do is entirely up to you. It could be something as simple as working in a supermarket, or something more complex, like tutoring kids or working in an old people’s home. Take some time to brainstorm your skills and go have a look at online job search platforms: they are one of the best tools to find part-time jobs in your area.
Work Freelance
Another option is to start a freelancing career alongside your regular job. This could be offline freelancing in the form of driving for Lyft, walking dogs or working as a coach. It could also be freelancing online by building websites for businesses, proofreading aspiring authors’ novels or designing logos. When it comes to freelancing, your options are pretty much endless!
In the beginning, getting into freelance work can be hard. Expect to wait a few months before you see a steady flow of money coming from your freelance work. But in time, you’ll be able to secure more clients and increase your rates, which could help you a lot when it comes to saving up for retirement.
Start a side-hustle
Finally, the most entrepreneurial among us stand to gain a lot by starting a side-hustle. Do you have a project you’d love to work on long-term? Do you want to be your own boss, at least for your second job? A side hustle is a great way to make more money while pursuing a goal that genuinely motivates you.
For example, you could start a blog or a YouTube channel. This is a great way for creative individuals to get paid for their talents, whether it be writing, makeup or doing reviews.
You could also start an online shop to sell thrifted items, antiques, or even homemade jewelry or cosmetics.
Your side-hustle can be anything you want it to be, and that’s the beauty of it. Whatever you’re good at, you can start using your skills to generate an extra source of income with the right mindset, the right strategy, and a bit of long-term planning.
And as a bonus, many people who start side-hustles find that they give them a lot of motivation and energy, that they are more rewarding than their regular job, and that they offer them a way to be useful to people that is very personal to them.
4. Be thrifty
To retire early, you’ll also have to cut on your expenses so you can save more. Thrifty habits can be easy to cultivate if you have the right motives and the right strategy. Here are some of our favorite ones:
Cut on your biggest expenses
Of course, reducing small unnecessary expenses is a vital part of saving money. But to make a serious indent in your spendings, you’ll have to find out what most of your budget is going to. Big expenses include things like your rent and transport.
Downsizing can do wonders for your budget. It’s common to think we have to rent or buy the biggest house that we can afford. But by living in accommodation that is below our budget, we can manage to save up more toward retirement, faster. So why not move into a smaller apartment? Or buy a house in a less expensive area? The money you spend on accommodation makes a vital difference to your overall budget.
The same goes for transport. Buying the biggest car when it comes out is unnecessary. Some of the thriftiest people find that they can save a lot of money simply by driving an older or smaller car, and cycling whenever possible.
Save money on food
Food is also likely to be one of your major expenses. Our greatest tip here is, whatever you can, make it yourself! Brew your own coffee and bring it to work, order takeaway as seldom as possible, and even start making your own bread or salad dressing. It’s best to keep meals to a restaurant or café as special occasions and to cook for yourself the rest of the time.
You can even save more money by planning, and preparing your meals in bulk. This will allow you to spend not just less time, but also less money on each meal. And talking about bulk, also make sure to buy non-perishables (like rice, pasta, spices, and pulses) in large quantities. This is a great way to make sure you get the best price for them—not to mention, a full pantry will encourage you to cook at home more!
Become a minimalist
Finally, embracing minimalist principles is a great way to be more thrifty. Try to keep the number of clothes you own to a minimum. Don’t buy items that you already own duplicates of. Minimalism can not only give you more peace of mind, it will also make you naturally more thrifty.
5. Get rid of your debt fast!
If you want to retire at an early age, you probably want to retire debt-free too! Having debts not only slow down your retirement goals, but it can also make you less motivated to save. After all, why put hundreds into a retirement plan every month when you still have loans to pay off?
Your first order of business when planning retirement should be to have a strategy concerning your debt. It can be a good idea to change your payment options so that you can finish paying it your debt off faster. The faster you can be debt-free, the faster you’ll be able to start saving toward retirement.
6. Can max out your employer matching 401K
If you are employed by a company, you’ll already have a retirement account called a 401K. We all put a percentage of our pay toward retirement, and in some companies, our employers do as well. This means that if you put 5% of your income into your 401K, your employer will deposit the equivalent of that amount into your account as well. So what does this mean? The higher your percentage, the more money you’ll get from your employer toward your retirement fund. Take full advantage of this, and max out your employer matching.
Final Words
Retiring early is a dream for many. But for those who are determined to make the most out of their retirement, it is a goal that comes with a solid strategy. To summarize, you can retire before 50 and enjoy the best years of your life by:
- setting clear goals and intentions that will keep your motivation alive
- saving more money toward retirement
- multiplying your sources of income
- cutting out on your expenses
- getting out of debt faster
- using your 401K to the fullest
We hope you enjoyed this article on how to retire early with no money, at 50 years old or younger. We hope this has helped you form a better understanding of what it takes; and remember, it’s okay to implement this strategy little by little as long as you can still see the bigger picture!
