How to Retire Early Without a Big Salary (It Starts with One Simple Step)

When you’re young, it’s easy to believe you’ll have plenty of time to build wealth later. But “later” has a way of arriving faster than you think. One of the most powerful financial habits you can need to adopt early is to pay yourself first.

That means making your savings and investments your first expense—not what’s left after bills and lifestyle. This one difference is often the difference between retiring comfortably or not.

In the U.S., the statistics are sobering. The 70th percentile 65-year-old has a net worth of just $340,000. That only generates about $12,000 of income a year. Add Social Security, and you might reach $60,000—barely middle-class. The median saver is doing far worse! 

So how do you change your story?

Start with what’s in your control, that means taking full advantage of the Thrift Savings Plan (TSP) or your 401k or 403b. You need to make sure you get the free match.  Would you not put $100 on a roulette wheel that only had red numbers?  This is free money, don’t lose it!  In the Military, here’s how it works:

• The government automatically contributes 1%.

• It matches the first 3% you put in, dollar for dollar.

• It matches the next 2% at 50%.

If you contribute 5%, you’re effectively doubling your savings because of that match.

If you and the government each put in 5%, and you earn an average return of 10% over 40 years, you could accumulate around $2 million. That’s six times the wealth of today’s 70th percentile saver—and half of that growth came from money you didn’t even contribute yourself.

Here’s a simple plan:

1. Start now. Set your contribution to 5% to get the full match.

2. Choose the Roth option. When you’re early in your career, you’re in the lowest tax brackets you’ll likely ever see, in most cases Roth is your preferred option.

3. Increase 1% every year. When you get an annual raise, bump up your contribution by 1%. Your take home pay will still increase, just not as much so you’ll hardly notice the difference, but over time it compounds into freedom.

4. Aim for 15–20% total. If you want to retire comfortably—and maybe early—this is your long-term target.

Paying yourself first isn’t glamorous. It doesn’t provide instant results. But it quietly transforms your financial future, year after year. Even if you’re not in the military, the lesson holds: save automatically, increase consistently, and let compound growth work for you.

As the saying goes, “The best time to plant a tree was 20 years ago. The second-best time is today.”

Check out this video for more details: https://youtu.be/ye6Zeq6Xi4A?si=JoTRq6K0mar7cZEq

 Education only. Not financial, tax, legal, or investment advice. Past performance is not a guarantee of future results.