29 Steps I Took to Leave the Workforce at Age 29

Posted by Madison on September 18, 2008
Steps to Leave the Rat Race

Today is my last day at work! No more corporate rat race for me. I’ve been planning an early retirement for as long as I can remember. Those close to me have been hearing about it for years.

At age 29 I left the corporate world behind and I’m embarking on a new chapter in my life: spending more time with my kids (ages 1 and 2), following my passion (teaching others about personal finance), and an overall life of freedom not tied to a JOB!

Here’s how I did it (and how you can too!)

Leaving the Rat Race at Age 29

  1. Save Early. I started my first IRA at age 16 based on advice from my mom. Proof that teaching your kids about money is very powerful.
  2. Save aggressively. I saved like crazy after I graduated from college, often more than 50% of our salary. Once our money was compounding really well we began decreasing our contribution percentage without much effect on the portfolio.
  3. Use low cost, indexed investments. We used a total market asset allocation with low-cost index funds instead of hot tips, speculation, or ultra risky investments. Our current portfolio holdings have an overall 0.148% expense ratio.
  4. Work the tax system. Volunteering to do other’s taxes helped me learn the ins and outs of the tax code. Knowing the rules helps to be able to work them in your favor and streamline your tax preparation time.
  5. Organize yourself. Staying on top of our accounts, whether it’s calling on a mistake, organizing 181 accounts or monitoring a credit report helped to maximize rewards and minimize penalties.
  6. Align your financing with your goals. When we were busy working with stable careers, we financed with an adjustable rate mortgage to get the best rates. Now that we’re ready to settle down, we refinanced with a somewhat more stable product.
  7. Prepare for retirement withdrawals. In addition to refinancing, I prepared for my lifestyle by creating CD ladders for short term money needs, developing a plan to handle irregular paychecks, and planning for my new retirement lifestyle cash flow.
  8. Maximize tax deferred and tax free options. We maximized the use of tax advantaged accounts including the public employee’s option to double-dip on retirement. Whenever a new plan was a available (like the Roth 401k) we took advantage of it.
  9. Learn from the best. I’ve spent a lot of time reading about others who retired early. The Early Retirement Forums, Retire Early Home Page, and the Motley Fool Retire Early forum were my main hangouts. I’ve probably read almost every thread in each one!
  10. Read the best. In addition to the online resources, my favorite early retirement books are Your Money or Your Life by Joe Dominguez and Vicki Robin and Cashing in on the American Dream by the Paul Terhorst. The latter is currently out of print, but you can find it at the library or get a used copy.
  11. Get paid what you are worth. Research and negotiation is a big factor in how much you are paid. In addition, you need to take advantage of the money saving opportunities on the job.
  12. Enjoy life. We traveled, had fun, and didn’t live like penny pinchers. In addition, I always tried to maintain a healthy life mix pie chart.
  13. Don’t underestimate a college education. Getting a marketable well paying degree was a key part of my success. In addition, going to grad school almost doubled my salary. I can’t put enough emphasis on a solid education. If you are a new grad here are 10 financial tips and 29 more financial tips to get you headed in the right direction.
  14. Set goals. The 4% withdrawal rate gave me an idea early on about how much I would need to save. I set yearly goals to meet this number. Use retirement calculators to find your numbers.
  15. Measure your goals. Each year we compared our portfolio to our goals and made sure we were on track for our dollar plan. We also did some end of year tax planning and made a finance checklist.
  16. Be frugal, but not too frugal. We try to save money when it comes to some things, like eating out for less. But I also know where to draw the line as there are some frugal tips I can’t (or won’t) do.
  17. Shop around. Comparing prices on insurance premiums and cell phone service saved us each month.
  18. Talk about it. People around me knew that I wanted to retire early. It wasn’t a secret. If it wasn’t for my support system of family and friends, I probably wouldn’t have done it so soon.
  19. Save for kids before they are born. We took advantage of financial strategies for infants and young children for our kids. One of those, was opening and funding 529 plans before they were born, freeing up money in our budget now.
  20. Miss your target. I was $7,000 short of my goal in October, but decided to jump anyways. The key is to know when you are close enough. With diversified income, it makes it a little easier to slide with the number.
  21. Stick it out. Two times this year alone, I almost didn’t make it to my goal. After my maternity leave I questioned whether or not I should stay home or go back to work. I went back. Then just two months later I was given the opportunity for an early exit when our pension plan was reduced. I stayed.
  22. Follow your passion. Early semi-retirement is ok. That’s what I’m doing. But now, my side income will come from what I love: personal finance. Semi-retirement can open the opportunity to leave the corporate world much sooner.
  23. Make a plan with your spouse. My husband and I decided to leave the workforce at different times to allow us to maintain health care for the time being. Because we want more children in the future, it makes sense for us to stay on a group policy.
  24. Frame it. I always believed that I could retire early. Nothing anybody said changed that. Not even all the nay-sayers…. I’d love to say that I proved them wrong, but actually I wish they would have embraced the idea for themselves. Instead they are still at work.
  25. Explore outside-the-box financial ideas. Bank IPOs, credit card arbitrage (using 0% balance transfer credit cards), and free money were my hobbies. While they didn’t contribute huge amounts to our savings, every little bit adds up, and over time it was probably an additional $50,000 at least.
  26. Learn from your mistakes. We built a big house that sucks money, including our our dumbest purchase ever: our sauna.
  27. Adjust for the unexpected. Just like everyone else, we had our share of unexpected expenses. However, it’s all about how you handle them that defines success.
  28. Plan your exit. Once you make your decision, get everything in place. Here are 43 tasks to get you ready!
  29. Don’t look back. Once you make your decision, enjoy your new life. There will be a transition period, but give it some time. I’ll be reminding myself of this in the next few weeks as I settle into my new routine.

What’s Next?

I’m working on creating some new goals, learning how to cook, and beginning early Roth IRA withdrawals.

I’m also going on a field trip with preschool, getting to watch my favorite t.v. shows again, and spending more time with my spouse … all things I wouldn’t have gotten to do with my job.

Update: Reflections on Leaving My Job… Six Months Later.

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Comments to 29 Steps I Took to Leave the Workforce at Age 29

  1. Hi Madison,

    Could you clarify whether you consider yourself retired, a stay-at-home parent, fully employed due to alternative income, or some sort of hybrid? I applaud your careful planning to reach your goals but I’m a bit confused on what those goals are. (I apologize if you covered this in previous posts!)

    I’d also like to see a pie chart detailing how you’ll cover expenses between your spouses salary, withdrawing from savings, and alternative income.


    Adam – Natural, Personal Finance

  2. Great tips, Madison. The most important of these is starting early. Many people wait until they are in debt before they realize they need to start saving for the future. If you can start by saving instead of starting off in debt, you are going in the right direction, making early retirement an achievable dream. Right now, I have no desire to work until I’m 65 – unless it’s doing something I want to do! 🙂


  3. Congratulations on your last day! I left my full time job a year and a half ago and haven’t looked back since! I don’t call myself ‘retired’ since I’m still working for myself, but I’m able to work a lot less than 40 hrs/week. A much better life/work balance!


  4. Excellent post filled with a lot of great info.

    I have a close friend who is depressed about her inability to retire. When she talks about other people in her age bracket who have retired she just shakes her head and says, “I just don’t know how they do it.”

    THIS is how it’s done. Great work!

    Marsha’s last post: Twenty Years Ago


  5. Congratulations and welcome to the club!

    jim at Blueprint for Financial Prosperity’s last post: MSN’s $100 / Week Food Bill Challenge

    jim at Blueprint for Financial Prosperity

  6. You rock my socks! Best of luck to ya! 😉

    Marc and Angel Hack Life’s last post: 22 Swift Tips to Increase Productivity

    Marc and Angel Hack Life

  7. Congratulations!!! You have given me some really good ideas to increase my income so that I can retire early.

    Tina’s last post: Interesting Articles from the Blog World


  8. Great tips and congratulations to you! As a twenty-something myself, I am very inspired by your successes. You’ve just gained another subscriber! I look forward to exploring your methods further 🙂

    Pushing30’s last post: A Jump in the Emergency Funds


  9. Excellent article.

    There are so many posts about preparing for self-employment or returning to the home full time to be with family bu rarely is there such a good list of tips for financial considerations. I think a lot of people fail to real look at the money aspects when leaving a job. They focus either on short or long term thinking but not both.

    Great job once again!

    Savings Toolbox’s last post: Venture Bank Online – A Good Down Home Bank

    Savings Toolbox

  10. Congrats, I’m shooting for 30.

    Enjoy your semi-retirement

    Jake’s last post: Real Estate vs Stocks – 8 Reasons why I choose Stocks


  11. Fantastic job! You’re proof that a well thought out plan and discipline goes along way.


  12. Congratulations!

    Everyone does it differently, just as everyone defines retirement differently. It is clear that your steps were planned, deliberate and focused on a better future. Many people have a hard time with all of that.

    One of my favorite lines in a song is: “…the rats keep winning the rat race”, and it has to feel great now that you’re out of it.

    I was ready to retire at 35 and then made some really dumb decisions. Back on the smart track now and retired at 49.

    I find the most difficult thing is the ill at ease feeling you get when you aren’t working during the week. It is almost like we have trained ourselves to only relax on the weekends.

    Anyway, those ill feelings are gone now.

    Good fortune to you and yours,


    Clair Schwan of Frugal Living Freedom

  13. heya there! Kudos to you. A great post. Feel inspired to retire soon too but definitely not @ 29. ;p

    Just wanna ask an aside question. You have tons of links to your post contents! Did you link them yourself or do you use a certain plugin that helps you do that?


    paul’s last post: 9 Fantastic Ways to get FREE Traffic


  14. @ Adam: I would have to say I have some sort of hybrid classification, as I can answer yes and no to all of the following: retired, a stay-at-home parent, fully employed due to alternative income….

    I’ll be living off both retirement income and alternative income. Here’s a link to the breakdown of where the income is coming from:

    My New Retirement Lifestyle Cash Flow

    @ Kendra: Glad to hear you haven’t looked back! I love finding others who have done the same thing.

    @ Jake: Keep us posted, you can do it!

    @ Clair: I’ll remember to reread your comment when those feelings set in…

    Thanks to everyone for helping me celebrate my last day at work!


  15. Wow, retired at 29, that’s incredible! I get a lot of comments and questions from people wanting to know how I did it at 47. Now I feel old 😉

    A note on that 4% safe withdrawal rate. Since you’ve used many of the same resources I have (Firecalc, etc.), I’m sure you’ve seen that the 4% number was really meant to support people at the more traditional retirement ages, with possibly 20 to 30 years of retirement. Like you, I have some alternative income streams, but always felt that when it comes time to tap my investments, 4% would be too much for my conservative self. I’ve read that for younger people, 2.5-3% might be safer. Have you selected a target withdrawal rate for your age?

    RetiredAt47’s last post: 5 Ways the Internet Saves Me Money


  16. awesome post!

    Living Off Dividends’s last post: The Trillion Dollar Bailout

    Living Off Dividends

  17. @ Retired At 47: I agree, at 29 4% would be way too risky. I set aside 2% in cash for next year. Ideally, I’m shooting for somewhere between 0-2%. I’ll report back at the end of next year where it ended up.


  18. Well Done!

    This is some achievement and thanks for sharing it with us. It gives great motivation to the rest of us who are still on that never ending threadmill of

    commute – work – commute – sleep – commute – work

    Until Debt Do US Part’s last post: Doing an intervention for someone who is addicted to debt

    Until Debt Do US Part

  19. Nice. I’m hoping to shoot for 49!
    Great blog, I’ll be reading more of this.

    Quit The Day Job’s last post: Debt and the Day Job

    Quit The Day Job

  20. Congradulations! It is so great to be able to retire early and enjoy your family! All the hard work and discipline in the early years makes it worth it!

    Sonya’s last post: Why Invest in Self Storage – Part V


  21. I can say I have did every one of these steps except # 1 and 2

    However, I am comfortable now, but I cannot see myself retiring early after a year of a sabbatical I will be bored.

    My job is extremely stable and flexible


  22. Congrats…..great summary of how you did. From a fellow blogger, I like the way you constructed the article and the links!

    Andy’s last post: The Good, the Bad and the Greedy – Wall Street Criminals on notice


  23. Well, I have to salute you my friend. I like the idea of having enough money to retire early, but I don’t think I would do it. I love my job, but I do supplement it with a pretty healthy foreign currency investing lifestyle. This just allows us to take nicer vacations. I guess if I ever get to the point where I don’t enjoy my job and I’m in a position to retire if I would like, then I would act. Cheers, congrats.

    The Geared Investor

  24. Good for you. I didn’t bail on the rat race until I was 50 and that was 20 years to late.

    Ray the Money Man

  25. Great article. Well done.

    It proves the power of compound interest and a solid mindset can allow you to achieve financial freedom.

    Read more about achieving financial freedom over at my financial blog below.



  26. Great for you- it takes ALOT of dedication to do this- wow- more than 50% of your salary is alot!


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