15 Secrets for Early Retirement

You may have heard of the FIRE movement, which stands for Financial Independence, Retire Early. It's a movement among people often in their 30s and 40s to accelerate their earning potential and savings in order to quit working while they're still middle-aged.

But you don't have to go all in on FIRE to take advantage of the ideas and retire before 65. Here are 15 tips to help you retire early.

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You can't save money if you don't know what you're spending on, and the best way to know what you're spending is with a budget.

Decide how much you need to spend on housing, food, transportation, and discretionary items in order to maximize your savings, and stick to it by tracking your spending. Online tools like Mint and You Need a Budget (YNAB) can help you start budgeting and keep your spending on track.

ALSO READ: Budgeting 101: How to Start Budgeting for the First Time

If you're not maxing out your 401(k) match at your job, you're leaving money on the table.

Corporations offer 401(k) matches to encourage retirement savings, but not every employee takes advantage of it because it requires you to take money out of your paycheck. But if your focus is on retirement, then taking full advantage of the match is one of the easiest ways to move closer to retirement.

Even if you're trying to quit working before 59 -- the age when you can withdraw tax-free from your 401(k) -- that shouldn't deter you from utilizing the match. After all, you can still withdraw from your 401(k) early if you want; you'd just have to pay a 10% tax penalty.

This one might seem obvious, but you may not have thought strategically about how to maximize your income. You may be able to take on extra work, or extra projects. There may be continuing education or a new degree that will increase your salary, or you may be able to negotiate a raise.

If you're young enough and you're frustrated with your earning potential, it may make sense to find a more lucrative career, which could mean going back to school or getting new skills.

If you're content with your income at your current job, you may want to look into getting a side hustle. A side hustle can not only give you extra income but open an entrepreneurial revenue stream that you can continue to monetize in retirement.

This could include creating online content like a blog or YouTube videos, renting a room in your house on Airbnb, or if you like making crafts, selling goods on a site like Etsy.

ALSO READ: The Best Side Hustles to Earn Extra Income

For most Americans, your biggest expense is your home, whether you're paying rent or a mortgage. Therefore, the best single decision you can make to save money is by moving to a low-cost area, especially if you're currently living in an expensive metro area.

You may be able to cut monthly housing costs by thousands of dollars as there are plenty of places in the country where you can get decent home for around $1,000 a month.

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If you're looking to take control of your finances, one of the best ways to do it is by working remotely.

Remote work will allow you to live where you want, giving you the opportunity to live in a low-cost area, and you won't have to commute, helping you save money on transportation.

Some remote work also gives the opportunity to earn based on how much work you do, giving even more flexibility to those trying to retire early.

One of the best ways to save money on transportation is by getting an e-bike, and potentially trading in your car for one.

Depending on where you live, you may be able to replace most of the trips you take with your car with an e-bike.

Similarly, if you drive an expensive car, you may want to consider selling it for a more economical version as transportation expenses like car payments can take a big bite out of a budget.

ALSO READ: 5 Ways to Save Money on Transportation

Moving out of the country may not be right for everyone, but if you work remotely, and don't have constraints like school-aged children that would keep you stateside, it could be a good fit for you.

Relocating to a place like Costa Rica or Mexico can reduce your living expenses dramatically, allowing you to accelerate your savings and bring your retirement date closer.

No retirement plan is complete without an investing strategy, and if your goal is to retire early, you'll likely want to invest in growth stocks that have the potential to deliver sizable returns.

If you favor a high-risk investing strategy, the good news is that growth stocks look cheap right now after selling off this year, so this is a good time to start buying higher-priced stocks.

While growth stocks can deliver high returns, you may also want to consider dividend stocks as these will give you a near-guaranteed income stream, and reinvesting dividends through a dividend reinvestment plan (DRIP) is also a proven tactic for accelerating the growth of your portfolio.

Dividend stocks are also better at withstanding recessions as they have a history of generating profits and sharing them with investors even in poor economies.

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In addition to your 401(k), you will want to make sure you're taking advantage of other tax-free retirement accounts like an IRA, or a health-savings account, which can give you tax-free savings on healthcare spending.

For 2022, you can contribute $6,000 to an IRA, allowing you to deduct that amount from your tax bill. If you're 50 or older, you can contribute up to $7,000.

Debt can be a killer if you're looking to retire early, so one of your first goals should be to pay down debt, especially high-interest debt like credit cards. You may want to assess your interest rate on other debt like student loans and mortgages, and pay it down accordingly, though you may be better off investing the money you would use to pay down low-interest debt.

Reducing debt now will help you minimize your expenses in retirement.

Before you can start thinking seriously about retirement, you must have an emergency fund. This is enough money in your bank account to cover three to six months of expenses in case you lose your job, or face an unexpected bill like a medical expense or a home repair.

Building an emergency fund is also a good first step to the kind of saving you'll have to do to retire early.

Some of the best retirement benefits come with jobs like police, the fire department, or teaching, and you may only have to work for 20 years to collect a pension.

Depending on your own career path, this may not be a good fit for you, but if you're still early in your career and early retirement is a priority, a pension can make a big difference.

ALSO READ: What Is a Pension?

If you're racing to retirement, you'll want to consider taxes as well. It might make sense to relocate to a state with no income taxes or one with no sales taxes. You'll also want to consider property taxes and any other tax breaks that might apply to you.

If you're living in a high-tax state, moving to a neighboring state might also be a good way to accelerate your savings for retirement.

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If you're intending to retire early, it's essential that you have a plan to pay for your expenses, as well as an investment strategy that is prepared for bear markets like the current one.

Additionally, if you want to retire while you're young, you'll want to make sure that you have a plan for how you're going to spend your time, as some young retirees realize they miss work and are bored without it.

When you're planning for retirement, take some time to consider hobbies and other interests you can work on once you're no longer working as you need more than just a good financial plan.

Jeremy Bowman has positions in Airbnb, Inc. and Etsy. The Motley Fool has positions in and recommends Airbnb, Inc. and Etsy. The Motley Fool has a disclosure policy.