It’s not uncommon to dream of retiring early, but having the capacity to exit the workforce on stable financial footing before the age of sixty-five requires a lot of preparation.

Follow these tips to help better your odds of reaching those leisurely days of recreation or extra family time ahead of schedule.

Start saving ASAP

Investing in your retirement early in your career can be key to building your savings since it will give your money more time to grow. A good place to start is by enrolling in your employer’s 401(k) plan. Doing so can help automate your savings and allow you to make pretax contributions, and your employer may even match a percentage of what you put in. Aim to invest at least that match amount and increase what you contribute by 1 percent or more every six to twelve months. If your workplace doesn’t offer a 401(k) plan or you aren’t eligible for it, consult with a financial advisor to identify other ways you can save for your retirement, such as by opening a Roth IRA.

Find extra streams of income

An extra stream of income, preferably a passive one, could potentially help you meet your early-retirement goal more easily. Popular options include owning a rental property, promoting products on social media for kickbacks, publishing an e-book, or producing an online course. You could then invest the additional money you earn in your 401(k), IRA, or other investment option to compound your savings.

Reduce your expenses

Try to cut back on your spending to free up more cash to invest. You might have to make sacrifices and determine your wants from your needs, though, so be prepared to do so. Cost-effective options to consider include: downsizing your home, dining out less frequently in favor of more home-cooked meals, buying used when appropriate, eliminating luxuries like monthly entertainment subscriptions, repairing your clothing and other items instead of replacing them, vacationing close to home, and enjoying thrifty leisure activities such as visiting your local public library and free public parks.

Avoid overborrowing

Debt can put a big dent in your wallet, raising the price tag of what you’ll pay for small and big-ticket items alike. For instance, did you know that buying a home for just under $416,100—the median price of a US home in the second quarter of 2023—with a 20 percent down payment and an interest rate of 6.49 percent (the 2023 quarter two average) would cost nearly $425,000 in interest over the thirty-year life of the mortgage? Or that you may pay extra for the luxury of using a credit card? Credit-card holders spent more than $76 in interest and fees in the fourth quarter of 2022; these expenses could add up to more than $300 over the course of a year. Make it a habit of incurring less debt so you can eliminate extra costs like these, such as by paying a bigger down payment on a home so you can get a lower interest rate, using your debit card for your regular purchases, or paying your credit-card balance in full monthly to avoid fees.

Avoid withdrawing too soon

If you do retire at a young age, avoid taking money out from your 401(k), IRA, or other tax-deferred plans early since doing so could incur fees and penalties. (The IRS currently allows penalty-free withdrawals from 401(k) plans and other retirement accounts after the age of 59.5, thought there are exceptions.) You’ll want to keep your money in these accounts as long as you can since they can grow exponentially if you do. Additionally, wait to begin collecting your social security benefits. The federal government allows you to begin withdrawing from social security at sixty-two, but if you can hold off until you’re seventy, you’ll be entitled to as much as 76 percent more.

The goal of retiring early can be a lofty one, but if you can start saving well in advance, rein in your spending, and take advantage of tax benefits, it can be done. Reach out to a financial consultant for help mapping out a strategy that’s right for you.