The Secret to Attaining Financial Freedom by the Time You Retire

You are probably one of many people want to be financially free, especially before they retire, so you can live a happy, fulfilled live. It’s the situation in which you make enough money to get by without working long hours. To reach this goal by the time you retire, careful preparation and calculated steps are needed.

Here, we’ll explore the key steps and considerations to help you reach financial freedom and enjoy a comfortable, stress-free retirement.

The Importance of Early Financial Planning

A CNBC article states that a recent survey of 2,000 Americans found that around 67% of them want to be financially independent. It also found that they do not require a substantial salary to achieve this.

Most of the respondents said that they need to earn a salary of around $94,000 per annum to achieve this. The amount is just $20,000 more than the national average, which is not hard to get for many.

However, despite having such modest expectations, not many Americans have attained financial freedom. Data shows that only 11% or 1 in 10 Americans consider themselves to be financially free. This depends on how individuals perceive financial freedom. Living comfortably is important to some people, but being debt-free is important to others.

Regardless of how you perceive this freedom, early planning plays a significant role in ensuring success. Your chances of reaching your goals in financial planning are greatly increased when you start early.

Your investments have more time to develop the sooner you start. You may benefit from compound interest, which is sometimes referred to as the eighth wonder of the world since it can help your money increase significantly over time. Early planning also provides a buffer against unforeseen financial setbacks, giving you time to adjust your strategy without derailing your overall plan.

As early as when you are a teenager, you can begin planning. According to Asset-Map, life cycle planning comprises five stages, including:

Teenage
Young adulthood
When you start a family
When planning for your retirement
Successful retirement

Even advisors do financial planning through life stages to ensure your goals and the path to freedom are aligned. Many financial advisors use tools to map your life stages with the assets you have and your income sources. This helps them phase out all the possibilities and create a strategic plan for helping their clients achieve financial freedom by the time they retire.

The Building Blocks of Financial Freedom

Several foundational elements are significant for attaining financial freedom. Make a thorough budget first to see where your money is going. Budgeting has five key purposes that are also important for becoming financially independent.

As right stated by Investopedia, it can help you with the following purposes:

Work towards your long-term goals
Prevent overspending
Ease retirement savings
Prepare for emergencies
Reveal spending habits

All these purposes can help improve financial planning. Make a budget that allows you to set aside at least 20% of your income, and as your income rises, you should think about raising this amount.

Investing is another critical component that many Americans are following. According to statistics, around 61% of Americans owned stocks in 2023, an increase of 3% from 2022. Moreover, it is the highest since the 2008 recession. The average amount of Americans owning stocks from 2001 and 2008 was 62%. However, this fell post the recession until 2023, when it soared back to 61%.

Paying off high-interest debt should be a priority. It was found that the total household debt was $17.06 trillion in 2023. Moreover, the average household debt by Americans was $101,915 in 2022. Your ability to become financially independent might be seriously hampered by debt since interest payments deplete your funds for investments or savings.

Practical Steps to Achieve Financial Freedom

Setting clear financial goals is the first practical step toward financial freedom.

After deciding on your objectives, make a thorough financial strategy. This plan should outline your budget, savings strategy, investment approach, and debt repayment plan. Review and tweak your strategy frequently to make sure you stay on course.

Investing and saving money automatically may have a big impact. Make sure you routinely contribute to your savings and investment accounts without having to think about it by setting up automated payments. This strategy makes investing and saving a seamless part of your daily financial routine by fostering the habit of doing so.

Maximizing your retirement accounts is another essential step. Make maximum contributions to retirement plans (IRAs, 401(k)s), particularly if your company matches your payments. Over time, these accounts can greatly increase your retirement savings due to their tax advantages.

However, the sad part is that despite the benefits, many Americans don’t invest in these accounts. A survey of more than 4,300 Americans was conducted in 2023. Through the survey, it was found that 4 in 10 people don’t contribute anything to a 401(k) plan.

Frequently Asked Questions

What is the 50-30-20 rule?

The 50-30-20 rule states that you should set aside 20% of your income for savings, 30% for wants, and 50% for essential requirements. The funds you’ll require for aspirations down the road should likewise be included in the savings category.

Which financial planning step is the most crucial?

Setting goals is the most important stage in financial planning. A financial plan, whether it is created by you or a professional, cannot be created unless you have a clear understanding of your financial objectives. Therefore, your plan should begin with a list of goals, whether large or small, and by when to achieve them.

What are the advantages of starting early with a financial plan?

If you start saving for retirement early, you might be able to invest a bit more aggressively. That’s because you will have more time to recover from short- and long-term market swings and other financial setbacks. Simply put, saving early increases the likelihood that you will meet your retirement goals.

Attaining financial independence before retirement might be a feasible objective via meticulous preparation and methodical implementation. Establish a strong financial foundation, begin preparing early, and define what financial independence means to you.

Establish specific objectives, automate your investments and saves, diversify your sources of income, and never stop learning about personal finance. By following these steps, you can attain financial freedom and enjoy a comfortable, worry-free retirement.

This post may contain affiliate links. Financial Panther has partnered with AwardWallet and CardRatings for our coverage of credit card products. Financial Panther, AwardWallet, and CardRatings may receive a commission from card issuers. Some or all of the card offers that appear on the website are from advertisers. Compensation may impact on how and where card products appear on the site. The site does not include all card companies, or all available card offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

More Recommended Ebike/Scooters

Check out these other ebikes and scooters I've reviewed:

Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.

More Recommended Investing App Bonuses

For additional investing app bonuses, be sure to check out the ones below:

M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.

More Recommended Bank Account Bonuses

If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.

Upgrade ($200) – Upgrade is a free checking account that’s currently offering a $200 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $200 Referral Bonus – Step By Step Directions.
Ally Bank ($100) – Of all the banks out there, Ally is, without a doubt, my favorite. At the moment, Ally is offering $100 to customers who open an eligible Ally account and meet the requirements. Here are the step-by-step directions to earn your Ally Bank referral bonus.
Fairwinds Credit Union ($175) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
US Bank Business ($900) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
GO2Bank ($50) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $50 referral bonus.
Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
Varo ($25) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $25 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.

Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.

Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.

Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:

SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
US Bank Business. US Bank is currently offering new business customers a $900 signup bonus after opening a new account and meeting certain requirements.
M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.

Feel free to send Kevin a message here.