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
- 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.
- 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.
- 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.
- 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 .
- 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.
- 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 .
- 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 .
- 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.
- 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!
- 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.
- 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 .
- 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 .
- 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.
- 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.
- 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 .
- 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 .
- Shop around. Comparing prices on insurance premiums  and cell phone service  saved us each month.
- 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.
- 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.
- 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.
- 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 .
- 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.
- 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.
- 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.
- 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.
- Learn from your mistakes. We built a big house that sucks money, including our our dumbest purchase ever : our sauna.
- 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.
- Plan your exit. Once you make your decision, get everything in place. Here are 43 tasks to get you ready! 
- 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.
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 .