How to Retire Early: 5 Steps to Kickstart Your FIRE Journey

If you’ve ever wanted to retire before 60 (or even 50), this guide is for you. I’m walking you through the exact steps I used to kick off my journey toward Financial Independence, Retire Early (FIRE) — a path that helps regular people build freedom, not just wealth.

Let’s break it down into five steps that anyone can follow — even if you’ve never budgeted, invested, or thought seriously about retirement before.

I used to think early retirement was something only rich people could pull off — or something you’d read about in a blog post and forget five minutes later. But once I learned how FIRE works, I realized it’s totally possible — even if you’re starting from scratch.

Step 1: Figure Out Your FIRE Number

This is the number that tells you exactly how much money you need to retire early.

Here’s the simple math:

• Multiply your annual spending by 25

• That’s your FIRE number

Example:
If I spend $40,000 a year, I need about $1,000,000 to retire early.

This is based on the 4% Rule, which says you can safely withdraw 4% of your investments each year without running out of money.

Pro tip: Use my FIRE Countdown Calculator to plug in your numbers and get a realistic timeline.

When I calculated mine for the first time, it was scary — but also super motivating. It gave me a target to work toward instead of just “save as much as I can.”

Step 2: Know Where You’re Starting From

Before you can build wealth, you need to understand your money right now. That means looking at:

• Income (what’s coming in)

• Expenses (where it’s going)

• Debts

• Assets (savings, investments, etc.)

I used my Net Worth Calculator to get a snapshot of my current position — and wow, it was eye-opening.

If you’ve never done this before, don’t skip it. Knowing your net worth helps you measure progress and make smarter decisions.

Also try the Debt-to-Income Calculator to see if your debt is slowing you down more than you realize.

Step 3: Cut Back and Save Big (Without Feeling Miserable)

Once I knew my FIRE number and current net worth, the next step was increasing my savings rate.

That’s the percentage of your income that you don’t spend — the more you save, the faster you can retire.

Here’s how I started:

• Canceled unused subscriptions (saved $50/month)

• Switched car insurance (saved $300/year)

• Ate out less and cooked more (health win too)

• Sold some stuff I didn’t need (made $500 in one weekend)

I didn’t go full minimalist. I just cut out the things that didn’t align with my goals.

Then I automated savings into a high-yield account so I wasn’t tempted to spend it.

If you can save 30%, 40%, or even 50% of your income — that’s FIRE fuel. Even if you’re starting at 10%, increasing it slowly still makes a big difference.

Step 4: Invest Like It’s Your Job

You can’t just save your way to early retirement — you have to grow your money through smart investing.

I started by:

• Opening a Roth IRA and contributing regularly

• Increasing my 401(k) contributions (especially to get the match — free money!)

• Opening a brokerage account for additional investing

I didn’t pick individual stocks. I stuck to low-cost index funds like VTI or FXAIX because they’re simple, diversified, and historically strong.

If investing feels scary, start with an app that simplifies the process. I’ve used:

• Fidelity for long-term retirement investing

• M1 Finance for automatic index fund “pies”

• Acorns to invest my spare change without thinking

Pro tip: Check out my article on Best Investing Apps for Beginners for tools I’ve actually tested.

I also made it a habit to invest first, spend second. Even $50/week can turn into six figures over time with compound growth.

Step 5: Build Systems and Stay the Course

Early retirement doesn’t happen overnight — it takes systems, consistency, and mindset.

Here’s what helped me stay on track:

• I check in with my net worth monthly

• I use a Google Sheet and a budgeting app to track spending

• I set small goals (like maxing out my Roth IRA or hitting 6 months of expenses in savings)

• I remind myself why I’m doing this — freedom, flexibility, and peace

You’ll hit rough patches. Your income might dip. The stock market will definitely wobble.

But if you stick to the plan, automate what you can, and keep learning… you’ll wake up one day with more options than you ever thought possible.

You Don’t Have to Wait Until You’re “Done”

One of the biggest lessons I’ve learned on this FIRE journey is this:

You don’t have to wait until you hit your FIRE number to start enjoying life.

That’s where things like CoastFIRE or BaristaFIRE come in. Maybe you don’t fully retire — maybe you just work less, or freelance, or pursue work that lights you up even if it pays less.

I’m still on my way to full FIRE, but already my finances feel lighter. I have a cushion. I have momentum. And that’s a huge win.

Early Retirement Isn’t a Dream — It’s a Plan

If you’re reading this and thinking, “Could I actually retire early?” — I want you to know the answer is yes.

You don’t need to be perfect. You don’t need to make six figures. You just need a plan, a little consistency, and a mindset shift.

FIRE isn’t about never working again. It’s about owning your time, your energy, and your life.

What to Do Next

• Use the FIRE Countdown Calculator to find your FIRE number
• Track your net worth monthly — even if it’s small
• Start investing with whatever you can — $20 is enough
• Pick one change to make this week that gets you closer to freedom

You don’t have to follow the traditional path. You can write your own timeline — and retire early on your own terms.