Retiring a millionaire is an aspiration for many Americans.
Coincidentally, a recent Northwestern Mutual study found that Americans think it will take $1.26 million to have a comfortable retirement in 2025. (1)
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You may, however, need to save a lot more than that if you want to retire early. While it’s one thing to have a nest egg that lasts 20 to 30 years, stretching your retirement savings for 40 or 50 years is a very different story.
If your goal is to retire early, saving and investing at a young age is key, and the right financial habits can make saving money a lot easier.
Business Insider recently interviewed several people who managed to achieve financial independence at a relatively young age. Here are five particular habits they say allowed them to retire early. (2)
1. Keep your housing expenses low
In July, the national median mortgage payment was $2,127, which is down $45 from June, according to the Mortgage Bankers Association. (3)
Meanwhile, Zillow puts today’s average monthly rent payment for all bedroom and property types at $2,025. (4)
There’s a decent chance that housing will end up being your largest monthly expense — and the less you spend on it, the more you might have to save and invest.
If you’re looking to buy a home, aim for one that’s less expensive than the maximum that you can afford. Or, buy your dream home, but rent out a spare bedroom so your tenants can help pay off your mortgage.
Anything you can do to keep housing costs down will go a long way in your effort to invest and retire early.
Read more: How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
2. Drive a low-cost car
Homes have a tendency to appreciate in value, so you could potentially make the argument for buying one that’s a bit more expensive since you may be able to sell it at a profit.
Cars, on the other hand, mostly depreciate in value. And if you’re able to keep your vehicle costs low, you’ll have that much more money to invest for retirement. According to Kelley Blue Book, the average price for a new car was $49,077 as of August 2025. Meanwhile, the average price for a used car was $25,393. (5)
If you’re willing to drive a used car with fewer frills, you could end up saving a bundle over time.
3. Cook most of your meals at home
SpotOn says the average restaurant markup on menu items is typically 200% to 300% of the total food costs, depending on different factors. (6)
That makes sense, since restaurants have other overhead costs to cover and need to turn a profit. But if you’re willing to cook most of your meals at home, you could save a lot of money compared to the cost of dining out or ordering in. And that’s money you can put into an investment portfolio for your retirement.
4. Delay having kids
An August 2024 survey conducted by BadCredit.org found that 52% of millennials and Gen Zers have delayed plans to have children. For 86%, that decision boiled down to financial reasons. (7)
If you hold off on having kids, you can establish yourself financially and build savings for the future at a younger age, which could be your ticket to an early retirement. Of course, the flipside to holding off on having kids is having to bear the cost of raising them later in life. Plus, biology is such that you may only have a certain window of time to have children.
With this in mind, you’ll need to carefully weigh the pros of having kids sooner rather than later to see if delaying makes sense for you. But at the very least, it could pay to wait until you’re financially stable — meaning, you have a solid emergency fund, you’ve established decent retirement savings and you have a steady job.
5. Limit your student debt
The average federal student loan balance is currently at an astounding $39,075, according to the Education Data Initiative. Meanwhile, the average balance among all borrowers, including those with private student loans, could be as high as $42,673. (8)
The less money you spend repaying a student loan — as well as the interest that comes with it — the more money you should have to save and invest for retirement. With this in mind, you may want to favor schools with lower price tags.
Other ways to save on an education include living at home and commuting to classes rather than dorming, pursuing work-study opportunities through your university, and taking on extra credits to graduate in fewer semesters.
Other pitfalls to avoid
A big part of being able to pull off an early retirement is making the right decisions.
For example, trusting the wrong people with investment decisions was one particular mistake that one early retiree couple shared with Business Insider. This couple reportedly chose an investment adviser who got paid on commission, and that advisor sold them a mutual fund with high fees that ate into their returns. (2)
A better bet is to use a fiduciary financial adviser who’s ethically and legally required to act in your best financial interests at all times.
It also pays to simplify your investments if you’re going to manage your portfolio on your own. Rather than paying expensive mutual fund fees, consider a low-cost S&P 500 index fund that gives you exposure to the broad stock market.
Finally, don’t put too much of your long-term savings into tax-advantaged retirement plans like IRAs and 401(k)s. While it’s nice to get a tax break on your money, these accounts can be very restrictive, imposing a 10% early withdrawal penalty for taking money out before reaching the age of 59 1/2. (9)
And if you’re planning on retiring early, your goal is likely to retire well before you reach that age.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Northwestern Mutual (1); Business Insider (2); Mortgage Bankers Association (3); Zillow (4); Kelley Blue Book (5); SpotOn (6); BadCredit.org (7); Education Data Initiative (8); Morningstar (9)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.