Your 20s may not seem like a time to focus on retirement. At that point, you're probably busy paying down student loans, chipping away at credit card balances, and attempting to sock away funds so you can eventually stop renting a place to live and actually buy one of your own. But if one of your goals is to retire early, then you'll need to start working toward it from as young an age as possible. With that in mind, here are a few things you can do during your 20s to help ensure that you're able to eventually leave the workforce when you want to.

1. Follow a budget

The sooner you learn to budget, the easier it'll be to start saving consistently for retirement. That's because budgeting will give you a better handle on your money and help you identify ways to cut corners on the spending front. To set up your budget, listing your ongoing expenses and consult your bank and credit card statements to see what they typically cost you. Then, compare those figures to your income to see if they align. You may find that you need to scale back in certain spending categories to free up funds for savings, which you'll need if you're hoping to retire on the early side.

Smiling young man in glasses and hat


2. Build an emergency fund

You never know when an unplanned bill or period of unemployment could upend your finances. But if you do a good job of building emergency savings, that won't need to happen. If you don't have at least three months' worth of living expenses socked away in the bank, make that your chief priority. That way, you'll have cash reserves to access if you lose your job and need money to pay your bills, or run into a huge expense, like a hospital stay or a major repair for your car. And avoiding debt is a good way to ensure that you're able to keep diverting a portion of your earnings to savings, as opposed to interest charges.

3. Eliminate high-interest debt

The more money you spend on credit card interest, the less you'll have to save for the future. Once your emergency fund is complete, start putting your extra money toward your outstanding balances. A smart approach is to pay off your balance with the highest interest rate first, and then work your way downward from there. Or, consolidate your debt -- a balances transfer is a good bet in this regard, provided your credit score is high enough for you to qualify for a competitive offer.

4. Start funding your nest egg

To retire early, you'll need lots of savings. The good news? If you're in your 20s, you have lots of time to accumulate wealth -- and you don't need to part with huge sums of cash every month to make that happen. You just need to save consistently, and invest your money aggressively for maximum growth -- namely, by loading up on stocks.

The stock market has historically delivered an average annual 9% return, so if you invest your retirement savings heavily in stocks over a 40-year period, there's a good chance you'll generate an average annual 7% return in your IRA or 401(k). And if that's the case, here's what your savings balance could grow to, depending on how much money you're able to set aside each month:

Monthly Savings Amount

Total Accumulated Over 40 Years (Assumes a 7% Average Annual Return)










$1.2 million

Data source: author.

You may not have the mindset to focus on retirement when you're fairly new to the workforce and are trying to build a career. But a few key moves on your part in the next few years could put you in a great position to retire early, and that's something your senior self will be more than grateful for.