Retiring 5, 10 or even 30 years early is possible (with the right strategy)
It's the great American dream—to say goodbye to the working world before you receive your AARP card. Some people are making it happen, too.
On one side of the spectrum, people are joining the FIRE movement (Financial Independence, Retire Early) which champions the goal to save 50% or more of your income in your 20s or 30s so you can retire before 50 or even earlier.
Others closer to retirement are reevaluating what retirement means altogether—and instead working toward financial freedom that allows them to work less or change careers.
Even for those who don't plan to retire early, some research suggests you may find yourself making that choice down the road anyway. According to a
"If a client has the financial wherewithal to retire early, I say go for it. No one is promised tomorrow, and life is too short," says Eric Bilger, a financial consultant with Thrivent. "If you have the money to secure the lifestyle you want in retirement, I say retire the next day."
Whether you're looking to retire by a specific milestone birthday or achieve financial freedom to pursue purposeful work and passion projects, working toward an early retirement could be a smart money move for you. Bilger offers four considerations that every aspiring pre-retiree should understand.

What it takes to retire early
It's no secret that retiring early is hard work. After all, you're growing retirement funds within a shorter time horizon, and it needs to last much longer. If you're serious about retiring early, you'll need to be diligent about saving, possibly commit to more modest lifestyle choices and develop a tax-efficient financial strategy that funds both wants and needs.
1. Create a retirement timeline
The first step to retiring early is to define what "early" means to you. What's your timeline? "When a client wants to retire early, my initial advice is always to start by creating a retirement timeline. This helps to identify what retiring early can look like and if it's possible for that client," says Bilger.
"Once you have a retirement timeline, you can then look at how to position your assets into 5-year 'buckets,'" says Bilger.
Because some retirement funds like Social Security and annuitization will not be available to you until a certain age, seeing your assets within these buckets on a timeline will help you determine where you need to focus your retirement investments to ensure you have income for the rest of your life.
"Figure out what income you need until you're eligible for those other checks coming in," Bilger adds.

2. Calculate retirement expenses and savings needs
How much you need in retirement will depend on a handful of factors—including your goals, your health and the economy throughout your retirement. There are also some factors that are unique to early retirement, like health care expenses and how much you can spend each year.
To get a ballpark understanding of your needs, run some numbers—you can use a
Retirement lifestyle expenses.
What will your retirement look like, and how much will that lifestyle cost? Another consideration is how you will budget your spending in retirement. For example, a general rule of thumb is to limit retirement account withdrawals to 4% in your first year and then reassess the next year. "The
Taxes.
Your retirement income will come from several sources, all of which are
Debt (future or current).
Unfortunately,
Inflation.
Without a working salary that adjusts to
Health care.
"The biggest challenge with retiring early is the
Charitable giving.
Will you continue to give in early retirement? Whether you intend to
Once you have those expenses calculated, you can better understand how to save and invest for them.
If you have the money to secure the lifestyle you want in retirement, I say retire the next day.
3. Evaluate and adjust your current financial strategy: Wants vs. needs
Here's where the real work starts. Typically, saving toward a normal-age retirement requires you to save 15%-20% of your income annually. For early retirement, that savings is closer to 40%-50%, which means following even a frugal lifestyle may not be enough to help you reach your goal.2 Own a car? Maybe it's time to consider a bike commute.
Start by restructuring your
"I spend a lot of time making sure that clients secure the annual income with guarantees," says Bilger. "Products like a

4. Maximize tax-advantaged accounts now for benefits early in retirement
All retirees will have to pay taxes on
One common strategy is to
Instead, you may be better off allowing your tax-deferred accounts to grow while you're still young and use taxable accounts in the meantime, especially if you think you'll be in a lower tax bracket in retirement. "Helping to identify tax efficiencies is something we are very cognizant of with our clients at all times," says Bilger.
There are other
Sounds great, right? The drawback is that if you deviate from these regular payments or even miscalculate your withdrawals, you will need to pay the 10% penalty, plus interest.
While Thrivent does not provide specific legal or tax advice, we can partner with you and your tax professional or attorney. A tax professional can help you weigh tax strategy pros and cons based on your portfolio and goals.

Retiring early starts with action today
The key to retiring early isn't so different from a traditional retirement strategy: save what you can, invest appropriately, and ensure you're making the most of your funds with tax-efficient planning.
Another similarity? You'll only retire once.
"I have helped several hundred people retire over my 30 years as a financial consultant. As a client, you only retire once, so it's to your benefit to have a financial advisor there to help you and guide you along the way," says Bilger.
If you're serious about streamlining your retirement goals and achieving financial independence sooner than later, work with a