10 Secrets That Can Help You Retire Early, According to Experts

1 | Keep track of your money and how you're spending it.

All retirement plans require some level of awareness about handling your finances and putting cash away each month. But experts say the process can become even easier if you regularly keep track of what you're spending and consider how you can maximize potential savings.

"Review spending over the last few months to set your budget baseline and then identify areas you need to cut back, setting goals and outlining steps to make your changes stick," family finance expert Andrea Woroch advises. "But also tracking your spending and saving is crucial, so use an app that links all your finances in one place. This makes it easier to see where your money is going so you can make better decisions with your funds."

2 | Aim for a savings amount, not an age.

For many people, it can feel like retirement is a deadline on the calendar that you have to hit. But if your goal is to stop working as soon as possible, experts point out that it makes more sense to focus on how much you need instead of when you need it.

"It's important to remember that retirement isn't an age—it's a number," says Robert Farrington, founder of The College Investor. "That number is the amount of savings and investments you have or the amount of income you can generate from your investments. The simple way to calculate your number is to take what income you need to live on and divide it by 0.04 percent."

"For example, if you think you need $80,000 per year to live, you need about $2,000,000 saved or invested. If you need $100,000 annually, your number is $2,500,000," he further explains. "Of course, you can work on other ways to generate that $80,000 per year with things like pension or retirement benefits—such as the military—and more. But the goal is the baseline."

"With that framework in mind, you have to see about saving as much as possible as early as possible to take advantage of compound growth. Even if you can stash away $100 per month at 18 or 20, you could be well on your way to early retirement by your late 30s," Farrington says.

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3 | Start taming impulse purchases sooner rather than later.

Even the smallest addition to your savings can make a difference, so don't overlook how much impact a few, smaller impulse purchases can have on your plans to retire early.

Woroch cautions that "$5 here and $10 can bust your spending plan and keep you in the paycheck to paycheck rut. So spend time now identifying triggers that lead to unnecessary purchases and come up with ways to combat them."

4 | Set up the right life insurance policy.

There are plenty of different methods for saving for your retirement, from 401ks to IRAs. But if you're looking to get the most out of your tucked-away funds, experts say there's one tactic that can pay off big if you start early enough.

"Start contributing to a cash-value whole life insurance policy now for higher withdrawals during retirement," Sanju Subnani, a financial planning and investing expert with JustAnswer, recommends. "Having cash value whole life in addition to stock investments allows investors to withdraw more income during retirement when the stock market is down. Starting whole life insurance now gives time for the cash value to build up, meaning retirement can arrive sooner than later."

5 | Get the most mileage out of your income.

There's no question that you're going to be putting plenty of your own money toward retirement so you can live off of it later in life. Of course, that amount will be impacted by how much you make and other unforeseen expenses along the way. If you're in the position to boost the growth of your nest egg in any way, however, taking advantage of the situation can help you reach your retirement goal much more quickly.

"Look for free money opportunities, such as 401k matching, HSA matching, and more. If your employer matches your contributions, it is free money," Farrington notes. "Never pass up free cash that can help you get to your goal faster. If you need more convincing, saving for retirement in a 401k is simple. All you have to do is sign up."

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6 | Start thinking about how much you'll spend in retirement.

When trying to set themselves up for an early retirement, most people focus too much on "the size of their nest egg," Chris Urban, CFP, founder of Discovery Wealth Planning, tells Best Life.

"But in reality, the most important factor for considering when to retire in my opinion is how much you will actually be spending," he says. "It is important to think about where you will live, how much it will cost, your overall tax situation (income, property, etc), your healthcare risks/costs, and your short-medium-long-term goals."

7 | Invest in the right stocks.

Even for those with some background in business, the stock market can feel like a mercurial and overwhelming place—especially lately. But if you're looking to generate more savings, experts say the right investments can be an essential tool in your arsenal to help you hit your retirement goals much faster.

"Whole life cash values are not tied to interest rates or the stock market, which means investment dollars can be invested in fewer bonds and more stocks," Subnani explains. "Historically, since stocks have outpaced bonds, this can mean retirement savings can grow at a faster rate than normal."

8 | Set a date and stick to a budget.

When you're hoping to retire early, it can be easy to fixate on the finish line rather than the race course ahead. That's why even if you're dedicated to the cause, experts say setting a few mile markers can help you pick up the pace and keep you moving toward where you need to be with your planning.

"Specific, well thought-out goals will help you focus and retire as quickly as possible. An estimated retirement date will give you something to work towards, even if things get in the way and slow you down—because you can always push back the date," Farrington notes.

"To help you set a realistic retirement date, create a budget and figure out how much you will need to spend in retirement. Determine how much you can save and invest until then, what that amount will grow to, and potentially what you could earn with a side business," he suggests. "Then, when your earnings from savings are higher than retirement expenses, you are ready to retire."

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9 | Build alternative sources of income.

Everyone should be so fortunate to have a job that allows them to live comfortably while putting a little something away for the future. But experts point out that it's never been easier to generate extra income on top of your regular earnings.

"Look for a flexible side hustle you can do in your spare time, as there are many options that allow you to work as much or as little as your schedule allows and from home. The extra money you earn can supplement your income to help you build up savings and investments to retire early," Woroch advises.

"For instance, if you work from home, you can make up to $1,000 a month by pet sitting through Rover.com. Other ideas include dropping deliveries while you're running errands, posting your professional skills for hourly freelance on Upwork, or offering virtual tutoring on nights and weekends via Tutors.com for $20 to $50 per hour," she suggests

And if you've invested in other properties as part of your retirement strategy, you can also use that to amplify your cash inflow.

"Rental income from real estate can help bring retirement closer rather than waiting on traditional investments such as stocks to grow," Subnani adds.

10 | Figure out how your Social Security payments will be impacted.

In order to retire early, it's also important to determine how your early retirement will affect your Social Security payments before you do so, according to Adam D’Acierno, investment advisor and founding partner of Strategic Capital.

"Be mindful that Social Security benefits are reduced based on earned income until one has reached their full retirement age," he explains. "If you plan to retire early consult with your finance team and tax advisor to determine your full retirement age to maximize your Social Security benefit."

Best Life offers the most up-to-date financial information from top experts and the latest news and research, but our content is not meant to be a substitute for professional guidance. When it comes to the money you're spending, saving, or investing, always consult your financial advisor directly.