Advertiser disclosure

Start At 25, Retire At 45 – How To Retire Well After Just 20 Years Of Work

Retiring early can seem impossible for most, but there are a lot of ways to increase your savings and reach retirement long before your 60s. Here's how to retire at 45.

According to the United States’ Social Security Administration website, the typical age of retirement is 65. However, many people are more ambitious when it comes to retirement.

If you’re part of this ambitious group, we have a list of suggestions that can undoubtedly help assist you in achieving earlier retirement.

The benefits of retiring early

The obvious reasons for early retirement involve doing enjoyable things aside from working. Traveling and seeing more of what the world has to offer are usually the two top things on the agenda.

However, according to U.S. News, retiring early has a long tail of benefits that are rewarding for almost anyone. These advantages include better health, newfound interests, opportunities to save money, more leisure time, and the freedom to explore other avenues of revenue, just because.

It is no wonder that many seek to achieve retirement before its typical age. In this article, I’ll share a theoretical approach to starting at age 25 and retiring at age 45.

But first watch our quick 2-minute video about the FIRE movement and how to retire early.

While this may seem crazy, as you’ll see below, it’s entirely possible. And if you haven’t already, check out my article on how much you’ll need to actually retire these days, because we’ll be using that as a target amount (hint: it’s $2 million).

I’m also going to assume you’ve saved a little bit, since 20 years is an aggressive timeline and $2 million isn’t easy to come by.

Let’s take a closer look:

The first step: Change your attitude towards money

The standard definition of money can be pretty accurately summed up in this article in Psychology Today. In it, money is identified “as having a particular kind of value that can be exchanged for other things.” It doesn’t get any clearer than that.

Many of us have assigned great worth to money when in reality it is “just useless paper and metal.” Although this is true, it cannot be denied that, despite being just paper and metal, it is what allows us to eat and survive.

It is not to say that individuals are to dismiss the value of money altogether, but instead alter, to some degree, how we use it and view it. The first step of early retirement is to modify our spending habits and our perceptions of money.

As opposed to assigning the spending of money to a better quality of life, cutting out unnecessary expenses is a great practice.

The typical savings requirement for incomes is usually 5%-15% of a person’s salary. However, according to Early Retirement Extreme, increasing savings to 40%-80% of revenue can enable individuals to acquire “six-figure net-worth’s” within a few years, which is an actual component of achieving earlier retirement.

What are the requirements for early retirement at different income levels?

Everyone makes a living, and this occurs at different incomes. The question is, how can people with lower incomes retire just as quickly as someone with a higher income?

Let’s take a look at how to do this:

$30,000 annual income

If you make $30,000 annually, you can achieve $2 million in twenty years by saving a substantial amount of your income. With the assumption that you have $5,000 previously saved, saving an additional $4,256.98 a month, at a 6% investment rate of return, will enable you to achieve your goal of $2 million in twenty years.

Yes, you’re right, how is this at all feasible for someone bringing in $30,000 annually? This amount far exceeds the yearly income of $30,000. So what is the solution?

The answer is to find supplementary methods of increasing your annual revenue—i.e., side hustles. Adopting things such as starting a side business or investing money you currently have saved is a good way to start.

Take your $5,000 and invest in commercial real estate, for example. How do you invest in real estate for just $5,000? The answer is simple—crowdfunding. EquityMultiple and Fundrise allow you to pool your money with other investors to fund real estate projects.

The real estate sector continues to succeed other reserves in the financial market. Although considered extensive, it offers substantial returns, despite its former fluctuations in the market.

Another consideration is adopting freelance writing. Take your love of writing to a new level by offering your writing services to other companies. Produce marketing content, product descriptions and other forms of writing and materials that businesses are always in need of for their company.

With this form of income, opportunities can be endless. Once proven successful, you can receive considerable earnings in addition to your current employment.

Other options involve producing or obtaining a product to sell on Amazon, ebay, or Etsy. As opposed to paying out the significant expense of hosting a website and selling online, you can do this via online platforms; allowing you to save money and acquire additional income to put towards your savings.

The opportunities are quite extensive in regards to acquiring additional cash for your $2 million retirement goal.

The point I’m making here is a $30,000 salary for twenty years won’t cut it if you want to retire at 45 with $2 million. While this doesn’t assume that you’ll be earning more and more every year (which, as your career progresses you should) but you’ll still need to supplement that income with a side hustle.

$60,000 annual income

Perhaps you are earning double the income mentioned previously and are adamant on retiring at the age of 45. Let’s say you have $20,000 saved. First, offer yourself a pat on the back every now and then for saving so much.

You are living well, but your goal is to save more and retire much sooner. To do so, you must save $4,042.04 each month for the next 20 years, at an investment rate of return of 6% to retire with $2 million. Or, if the return on investment rate stands at 10%, you must save $2,537.26 monthly.

At a rate of 8%, a total of $48,504.48 must be saved every year for twenty years. This implies that about 81% of your yearly income must be allocated to your savings. At an investment rate of return of 10%, approximately 51% of your $60,000 income must be saved totaling $30,447.12 yearly for the next 20 years.

$100,000 annual income

At a salary of $100,000 yearly and an assumed savings of $40,000, because you have been so stellar with your savings portfolio, you still wish to achieve early retirement.

To achieve $2 million in 20 years, saving $3,755.48 monthly is necessary. Gathering this much monthly involves capitalizing on an investment that offers an investment return rate of 6%. Or if the investment offers 10%, $1,861.74 is to be saved monthly.

At a rate of 6%, $45,065.76 must be saved annually. This is approximately 45% of your $100,000 annual income. At an investment return rate of 10%, 22% of your annual income must be saved yearly.


Retirement Calculator

See how much income will you need in retirement?





















What lifestyle should I adopt to assist in accelerating my savings for earlier retirement?

Not everyone can win the lottery and retire faster than most. Although it may seem impossible to save so significantly, it is conceivable. It merely requires discipline and a lifestyle change. For example, adopting a minimalistic lifestyle can help you to achieve your goals much faster.

Saving on the expense of cell phones and their bills, high-end clothing, eating out regularly, and other forms of pleasure can accelerate your savings for earlier retirement.

Also, downsizing your home to something smaller and more affordable can slice your mortgage and your spending in half.

Many of us feel the need to live above the grade, and this can force us to live outside of our means. It is a practice that can leave you financially depleted and can, in turn, thwart you from achieving your goal.

Another lifestyle change that can take place is the addition of supplementary income.

If you’re presently working just one job, consider other avenues of revenue. As mentioned prior in this article, there are so many ways individuals can increase money flow. The important thing is to keep busy and hoard as much money as possible in a short span of time.

In a YouTube video posted by, Project Life Mastery, the host Stefan speaks about how adopting a lifestyle change and altering our attitudes can position us for success and financial growth. By embracing a positive mindset and honing their skills, individuals can reach more significant achievements.

How can I start investing so I can retire early?

In order to achieve your early retirement goals, you need to invest your money. There are a few different strategies you can use. You can go old school and call your parents’ financial planner. While this comes with the perk of occasional face-to-face interaction or the ability to speak to a human over the phone, many people would prefer a tech solution instead. In this case, you can consider a robo-advisor. 

Robo-advisors like Wealthfront can help you to automate the task of investing. Wealthfront offers customers its Self-Driving Money feature which can do everything from automating your bill payments to instantly routing your savings into your investment accounts. 

With Wealthfront it’s super easy to start investing. Simply choose from one of their existing portfolios and add or delete the ETFs you want to invest in. Or, build a portfolio from scratch using Wealthfront’s collection of ETFs expertly selected by their research team. You can invest in what you are most passionate about with socially responsible investments (SRI) as well as ETFs in the category of technology, healthcare, or clean energy. 

After you choose the investments you want, Wealthfront will do the rest. They take care of everything from daily rebalancing to tax-loss harvesting.


The foundation for success, and in turn money, is achieved just by altering our attitudes, controlling our spending habits, saving and working diligently to improve our revenue

About the author

Chris Muller

Chris Muller

Chris has an MBA with a focus in advanced investments and has been writing about all things personal finance since 2015. He’s also built and run a digital marketing agency, focusing on content marketing, copywriting, and SEO, since 2016.

It's your money. Make the most of it!

Get thoughtful advice on how to save and invest in a way that supports your ambitions and values.

Aweber pixel