I'm a financial planner, and there are 3 things I tell every client who wants to retire early

The offers and details on this page may have updated or changed since the time of publication. See our article on Business Insider for current information.

Paid non-client promotion: Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate investing products to write unbiased product reviews.

• There's plenty of information available about how to reach financial independence and retire early.
• But it typically only gets you to a bare minimum amount, which isn't realistic for most people.
• With my clients, I recommend saving 30% of their income, and knowing why you want this.

There is no shortage of information about how to reach "financial independence" so you can retire early. However, these strategies usually focus on building just enough assets through investments to provide a baseline annual income for many decades.

That's not the route I take with my financial planning clients who want to set a goal to retire early.

The fact is, you won't be in a solid financial position if you scrimp and save for the next 10 years so you have enough to retire in your 30s or 40s and live off $30,000 or less for the rest of your life (which could last another 50 to 60 years!).

So what do we tell clients instead to help them retire when they want? We focus on three core concepts.

Build a robust plan rather than aiming for the bare minimum

We define financial power as the ability to have freedom and choices over how you live your life.

When you design a plan that requires you to live on less than the median household income in the U.S. for half a century, you're left with an extremely limited set of options for what you can do with your money over time.

Frankly, having no contingencies in place is also poor planning.

What happens if your health deteriorates? If you make a poor investment decision that costs you? If the cost of living simply exceeds what you planned to spend annually?

When our clients want to retire early, we support that choice — and we want to build a realistic plan for doing so. That means we don't assume they'll be able to spend half of what they do now once they retire or that their current lifestyle is the one they'll always be happy with for all eternity.

You are not the same person you were five years ago, and it's very unlikely you will be the same person as you are today in 10, 15, or 20 years. Don't lock yourself into lifestyle choices now that you may find unsatisfactory in the future.

Save a very large percentage of your income

So, how do you build financial power to support a plan that allows you to retire early without limiting yourself?

You contribute a significant amount of your current annual income to long-term investments to grow wealth over time.

By significant, we're talking about saving a minimum of 30% of your gross income each year.

Realistically, that figure likely needs to be closer to 40% or even 50% if you want to retire in your 40s or 50s. (Remember, the "normal" retirement age is 67, so mid-50s is still early!)

Yes, this is a lot of money. It's not doable for everyone. However, an aggressive savings rate is required for early retirement because the loss of income from not working makes such a huge difference in financial outcomes over time.

Even working five more years can mean having hundreds of thousands more in assets at the end of your lifetime.

When you start talking about cutting your working career short by 10 to 20 years, that means your retirement plan has to do a lot of heavy lifting to support your spending — even if you spend relatively little or much less than you did while working.

We make sure clients understand that even if they have tight control of their cash flow (and save a lot), not earning an income has a major impact on how much they'll have down the road in their later years. 

If early retirement is even a consideration, then saving 10% to 15% of your income simply is not going to get you to the goal. The earlier you want to retire, the more aggressively you'll need to save now.

Understand the 'why' behind your goal

You can use your money to create happiness in your life, but only if your financial goals align with your values and what's most important to you. To do that, you have to know what those values and priorities are in the first place.

Early retirement can be a great goal when used as a path toward something important to you. It might not be all you hoped for, however, if you're trying to retire early just because you hate your job.

Before you set such a massive financial goal, it's worth checking in with your mindset and considering what feelings seem like constants in your life regardless of your circumstances. 

Can you think of a time when you thought, "If only X were different, then I would be happy," — but then X changed, and you still felt the same?

This is a very human experience, and there's nothing inherently wrong with it. But it is important to acknowledge this tendency and realize that the grass truly is not always greener on the other side.

If someone values contribution, community, and meaningful work, early retirement might be a terrible goal! On the other hand, if you identify autonomy and adventure as part of your value system, early retirement might be a great goal that allows you to more fully live those values.

This is why we spend so much time talking about values and priorities with our clients. Of course, we cover the numbers, too, but good financial planning goes far beyond spreadsheets and projections.

Understanding the why and purpose behind your actions is a critical piece of the puzzle. Your values are the driving force that shapes and informs goals that will actually feel satisfying to achieve.

This article was originally published in April 2022.