Retiring by the time you turn 40 might sound impossible, but it most definitely can be done. With some careful retirement planning and creative savings strategies, you can begin your retirement while you are still young and spunky.

Getting started on your retirement savings as soon as possible is most important. The longer you have to work toward your retirement plan, the closer you will come to meeting your retirement goal. If you have any debt, a top priority has to be getting rid of it. Meeting with a financial planner at least once is key to helping you figure out some of the areas where you might not be savvy. Being prepared to cut back and save everywhere will be paramount.

Mortgage and real estate

Paying off your mortgage or having very affordable mortgage payments is going to help significantly in your being able to retire early. Consider downsizing, refinancing, and increasing payments to reduce your mortgage debt as much as possible.

Purchasing real estate that can provide rental income indefinitely is another great way to increase your income potential for the future. That extra income can also help pay off other debt and mortgages while you prepare for retirement.

Conserve, reduce, and save

You are going to have to make sacrifices if you want to retire as young as 40. We have all heard about eliminating unnecessary expenses such as restaurant meals, coffee shop drinks, and luxury items. Retiring early is going to take a lot more than just that.

Consider moving the whole way you live to a minimalist existence. This means not only giving up the flat screen TV but also getting rid of the cable plan, the unlimited data plan on the phone, and the tablets, laptops, and desktops. Use one electronic device and take advantage of free WiFi.

Learn how to garden and grow your own food. Join a neighborhood co-op and share as much as you can. Take on a no-spending challenge for one year. Learn how to live with only the necessities. Cutting back and conserving during your early adult years will help get you closer to the goal of retiring at 40 because you will be able to invest the money you are saving.

Once you start cutting costs, it will become easier to find ways to save. If you go one year without buying any new clothes, for example, it might be easier for you to extend that for another year—or to make cuts to other areas of your budget.

Forget typical 10 percent savings plans—we are looking at saving closer to 50 percent of your income now. By saving this drastically, you can help guarantee that you will have the funds you need to retire early.

Retirement and savings accounts

Investing in accounts that will yield future returns is obviously a smart way to guarantee income for retirement.

  • Money market accounts are like a combination checking/savings account, except that the interest rate is usually much higher than you would get with a regular savings account. You are limited on your withdrawals each month, but that shouldn’t be a problem because the point is to leave the money alone.
  • CDs are another good choice as they also offer a decent interest rate and a way to increase funds over time. They have a fixed term and a fixed interest rate so you know what you are getting.
  • Stocks are a riskier investment, but the rewards can really pay off if you invest wisely.

Your typical retirement account is not going to be very beneficial right away because you won’t be able to access the funds until much later in life without penalty. However, if you are in good health and expect to live a long life, having these retirement accounts for later is still a good part of your early retirement planning.

Jeff Rose is a Certified Financial Planner who writes about financial planning topics at Good Financial Cents. His latest project, The Debt Movement, aims to help people pay off $10,000,000 of debt in 90 days. You can join the movement and get a chance to earn some of the $10,000 debt scholarship money by visiting