Retirement Steps to Retire at Age 30 or 70

Retirement Steps We All Should Take

The only way to retire early or successfully is with a plan. Learn the three critical retirement steps from someone retiring in his 30s.

This is a guest post by Benjamin Davis, the man running From Cents to Retirement, a blog where he explains, step by step, what he’s doing to retire early. Ben recently published his first book, “My Strategy to Retire Early.”

Meet from Cents to Retirement

Until 2012, I was so happy with my life that I didn’t think of retirement. In fact, savings were automatically scheduled from my bank account, and I wouldn’t think about money, saving or my retirement at all. Sadly, in late 2012/early 2013, I developed Chronic Fatigue Syndrome (CFS) while doing my Ph.D., This made me re-think my entire life. 

In 2014, I decided to do something about my situation, because it became unsustainable for me to have a full-time job. I had to drag myself to the office. Some days were better than others, but those were tough times. I developed a few tools that helped me get through my Ph.D., including diet and meditation.

However, I knew I wouldn’t have a long career, and, unlike many people, have a fat 401k and comfortable retire. I had five to ten years to do what many people have 20 to 30 years to do. Early retirement was inevitable.

Learning My Retirement Steps

I remember the day I sat down with a bunch of papers and a calculator, and I assessed my finances. I discovered memberships I wasn’t using – but was still paying for – and other items I’m not proud of. I figured I could cut my expenses aggressively and move those funds to an investment portfolio.

In this period, I read over 100 personal finance and investing books, educating myself financially and learning about investing and the steps to retiring early. I fell in love with real estate investing, and put my knowledge to work. I found many early retirement and finance blogs that gave me the confidence to start putting my plan into practice. I set my goals and started working towards them.

Today, I’m on track to retire by 33 and move back to Portugal. I have a portfolio mostly exposed to real estate, although I have some positions in the stock market. I’m hands-on with my real estate investments when my health permits. I publish resources for real estate investing, including free real estate bookspro forma explanations and how to get rid of stuff, such as couches.

What I’ve learned is that there essentially three quality retirement steps, which I would like to go through in the following. I think that the information that follows is valuable regardless you want to retire early like me, or later. 

The Earnings Steps to Retirement

This is the step to retirement that varies the most, depending on what age you want to retire. If you’re in your 20s and you want to retire early (say before your mid-40s), it’s best to hustle like there’s no tomorrow and maximize your monthly cash flow. Having a 9-to-5 job is great and a solid foundation to earn money, but take it further.

Hustle after your job! You have a million ways to make extra money. I’m not covering them in this post, but I can tell you that I’ve started to make good money online. Consider starting a blog, making an online course, or even publishing an e-book. You can make good money as a freelancer writer, too. The Debt Free Guys published a great video on attracting money here, which I recommend.

It’s never been easier to start a business (and shut it down if it doesn’t work). Take calculated risks, if you think it would accelerate your ability to retire.

The Savings Retirement Steps

This is the retirement step that applies to most people. Regardless if you make $30,000 or $300,000, save and live frugally if you want to retire comfortably. I have recently published an extensive list with tips on how to save money. You’d be surprised with how much money you can save by turning the lights off more often or walking to work instead of driving (if possible).

The most effective technique I’ve ever found to work is to cash out the money I need for the week or month and then live off that money. You’re way more reluctant to spend cash than when paying for stuff with credit cards. If you cash out, stick to and manage your money in a more effective way like money chunking or this great app by Mvelopes.

The Investing Steps to Retirement

The last step to a good retirement planning is investing. Investing your money makes your savings last longer. If you can live off the dividends, you’re set for life. The more frugally you live, the longer it’ll last. 

There are many options with investing. Real estate can be a great investment, but it will require capital upfront. In addition, be prepared to be hands on, unless you’re willing to pay management fees. Depending on the circumstances, this can be a deal breaker.

Stock investing is more passive, but it requires choosing appropriate stocks. Either spend time investigating stocks or buy pre-defined “packages,” such as low-cost ETFs. Use a tool, like this, to monitor your investments and manage your money from day-to-day.

You don’t have to work towards retiring in your early 30s, like me. However, start looking at these three angles if you are planning your retirement. Literature may help, but test different techniques to see what works best for you.

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