Can You Retire Early in 10 Years With an Average Job?

Retiring Early on Average Income in 10 Years

In order to retire in 10 years and live off passive dividend income using the 4% rule you’d have to save at least 80% of your income each year.

With that said, I recently watched a video from a guy who tore apart the idea of early retirement and said that it simply wasn’t possible for the “average” person. An average person he assumed in America was someone earning $36,000 a year, which is roughly $31,000 a year after taxes. In order to save 80% of your income that would mean you’d need to live off of $6,200 a year.

Simply put, that’s not possible starting out in America unless you’re sleeping on someone’s couch, walk to work and don’t have much in the way of discretionary expenses. That number is even lower than the minimum Jacob at Early Retirement Extreme has of $7,000 a year in expenses.

*If you still have loads of debt I strongly recommend you pay those off before you even begin starting your early retirement journey. Attack your debts first, then attack saving for early retirement.

So if an average person can’t save 80% of their income, is early retirement out of their reach?

“A dream doesn’t become reality through magic;
it takes sweat, determination and hard work.”
-Colin Powell-

If you live on an average income and want to increase your savings rate the answer is simple. You need to increase your income. On an average income there’s a lot more upside than there is ways to trim expenses. This depends on each individual circumstance, but if you’re already living within your means and are on a lean budget, the best way to push towards early retirement is to raise your income. Of course that’s easier said than done, but there are essentially three ways you an do it.

  • Increase your hourly rate – You can do this by attempting to get a raise at your job or by finding another job where you trade time for money at a higher rate.
  • Increase your hours – This may be at the same job by taking on overtime if offered or additional shifts.
  • Find another source of income – There are a ton of ways to make money. After your day job get part-time job, work a side hustle, find a freelancing gig, teach yourself a skill and market it online with a website. The list goes on and on.

Without hard work and determination towards your goal, you’re not going to reach it, and that’s the point. Early retirement is not easy to achieve. You have to wake up each morning and attack the idea with vigor and persistence. You can’t simply go to your average job, then come home and watch TV all night and expect to be able to retire in 10 years, sorry just not gonna happen. You have to bust your butt and get it!

I knew that I wanted to be financially free by the age of 30 and made it my purpose to do so. That meant I worked a full time job, a part time job, and consumed as many articles and books as I could about financial freedom (read about my journey to financial freedom here). Whenever I had extra money saved I immediately found ways to put it to work whether through investing in stocks, buying a business or investing in real estate. The more my dollars worked for me, the more free I became.

“If you will live like no one else, later you can live like no one else.”
-Dave Ramsey-

So can you retire in 10 year on an average income? Probably not. But if you’re shooting for something that is way above average, you have to act above average to get there as well.

Make early retirement your purpose and create an emotional attachment to the outcome. If you do that, your mind will start focusing on finding more ways to increase income and cut expenses to achieve your goal. However, if you want to simply be average and not gain your financial freedom, go back to your day job and TV.