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Most of us work hard throughout our twenties, thirties, forties, and fifties. Some of us started working as teenagers and we’ll continue to earn an income into our twilight years. But if the opportunity exists to retire, which is to say give up working as a way to pay the bills (rather than for enjoyment), most people will jump at it. What’s truly amazing is that so few people plan for this outcome. Sure, you probably authorize your company to pull pre-tax income from your paycheck and put it into your 401K account. But do you withdraw the maximum? Do you take full advantage of a matching program? And do you have other accounts in place to supplement your 401K? With social security likely on the way out and the cost of living continuing to rise, you really need to think about ways to sock more money away for your golden years. And this is especially important if you want any chance of retiring early so that you can get to your bucket list while you’re still young enough to jump out of an airplane or climb Mount Everest. So here are just a few tips to help you get there sooner.

1. Contribute to retirement accounts. This is an absolute must if you want to retire early. But it’s not just about adding principle. The way to make more money with compound interest accounts is to put in as much money as you can as early as possible, which means starting your 401K and a Roth IRA when you’re in your twenties. Unfortunately, this is when most workers can least afford such payouts. Many are starting with low-paying jobs, trying to buy homes and start families, and they simply don’t have extra cash to set aside. But if your plan is to retire early, you’ll have to try to find a way to put as much as you can into these accounts.
2. Invest wisely. As many people near the age of retirement have found out during the current recession, it doesn’t always matter how wisely you invest; if the stock market tanks, everyone goes along for the ride. However, that doesn’t mean you can’t find ways to make your money work harder for you. For example, you can buy property. Your own home is a great asset that, once paid off, could net you an excellent return upon sale. Of course, you might have to wait a few years, give or take, for a seller’s market in order to capitalize. But you can also invest in rental properties as a way to earn a passive income, or put your money into a real estate investment trust (REIT) that pays out a huge amount of earnings (90-100%) to investors annually in dividends. You should also hold a diverse portfolio of stocks, bonds, and mutual funds. But if you’re looking for an investment backed by assets, real estate can be a good bet (so long as you can afford to hold it for a while).
3. Pay extra on your mortgage principle. You don’t want to have to pay a mortgage when you retire and find yourself on a fixed income, so if early retirement is a goal, pay down your home loan faster (and save on interest payments) by putting more towards your principle each month.
4. Watch out for credit card debt. Many Americans find themselves saddled with credit card debt in this consumer society. But rather than giving in to the call to buy, live frugally now. You’ll have more money to show for it down the road and you won’t have wasted a huge amount of money on interest payments.
5. Understand retirement benefits. At what age can you retire? Some say 59.5 while others put it at 65. What you really need to know, however, is when your retirement accounts will start paying out. If you have money in the bank to support yourself, of course you can retire early. But if you’re planning to live off retirement benefits, you may have to wait until your accounts mature. Otherwise you’ll pay the penalty for early withdrawal, which could be 10% on top of regular taxation.