Am I saving enough for early retirement? 9 milestones I’m using to track my progress

Early retirement can be the greatest gift you can give yourself. Yes, you have to work for it. Yes, the rest of the world would like to withhold it from you as long as possible. But ultimately your hard-earned freedom is better than a million spa days or cold beers.

Reaching financial independence is one of the best feelings in the world. And that feeling is yours to grasp.

That said, many people on the path to early retirement, the goals of financial independence become a daily source of stress. Anxieties about the future cast a dark shadow over decisions in the present. It’s not unusual to feel some level of guilt or buyer’s remorse over every purchase, no matter how small.

Others’ early retirement experiences, meanwhile, lead to toxic comparison rather than inspiration. Everyone else seems to have it more together, or possess some fundamental advantage—a higher-paying job, less debt, fewer responsibilities, a wealthy family, etc.

You might start to wonder…

• How much do I really need to retire?
• Am I saving enough?
• Am I being realistic about my financial goals?
• Is early retirement even possible for me?

If these questions are causing you to sweat, numbers will offer little comfort. It probably won’t help you if I tell you should have saved half a million bucks by 30, or that you need to contribute $5,000/month for the next three years. I’m also willing to bet you don’t need another retirement calculator to futz around with, hoping your timeline and dollar figure will magically change.

Besides, everyone’s route to early retirement is different. Maybe you’re starting later than Mary, but earlier than Joe. Perhaps you have more money than Linda but way less than Neil.

The truth is, there is no surefire playbook that everyone can follow.

Let’s ditch the numbers and the comparisons

So, instead of giving you fuel for the shame-cycle or another unhelpful dollar breakdown, I want to use this opportunity differently. I want to build you up and tell you what it really means to be on the right track toward your FIRE goals.

Here are nine milestones that everyone successfully saving for early retirement reaches at some point. Wherever you are in your journey, pat yourself on the back—because no one can take these away from you.

9 signs you’re on track to financial independence

1. You’re done with living your life on auto-pilot

Day one of the retirement journey is the day you wake up and decide, “enough is enough.”

For many of us, “enough” means enough work. Enough of the crappy jobs. Enough of the long days. Enough toiling away all week only to stumble exhausted through the weekend. Enough waiting for two weeks of vacation a year to actually live your life.

“Enough” could also be enough worry. Enough debt. Enough struggling to make rent and pay bills. Enough bad habits and regrettable decisions. Enough arguments over money. Enough insomnia. Enough living uncontrollably.

Whatever “enough” means to you, you’ve reached it and the burnout is real. You’ve likely blown past it, in fact. You’re done with things as they are and you’re ready to make a change. Hold onto that feeling—it will propel you through what’s to come.

2. You’ve started paying attention to your finances

This usually follows closely behind the first milestone, or happens simultaneously. You begin thinking about your money in a whole new way. You start to carefully track your income and expenses.

You create a budget. You figure out what you can afford to spend every day, week, month, and year.  For the first time, you’re planning ahead. Your costs are becoming predictable. You know what your bills look like and what groceries you need to buy every week.

Perhaps you’re also starting to save some money—putting aside a bit at the end of every month and taking advantage of opportunities to spend less.

In any case, you’re feeling a growing sense of accomplishment and control. You have a taste of what it’s like to be in charge of your money, rather than the other way around.

3. You’ve made it out of debt

This is a big one. The day you become debt-free is a cause for celebration. You’re no longer working to pay someone off. Your money is yours to use (and save).

I’m not referring to all debt here, just most kinds of debt. We’re talking student loans, car loans, credit card debt, and so forth. You don’t need to have paid off your mortgage at this point.

Some people are fortunate to never have major debt (again, besides mortgages), but they’re not superior for skipping this stage. On the contrary, people who have paid off debt are arguably better equipped to reach financial independence. They’ve learned hard lessons and developed powerful money-saving muscles. Few life experiences are as instructive.

4. You’ve set a retirement date

Knowing where you’re going is half of what it takes to get there. You’ve determined when you want to retire and how much money you’ll need to do it.

This is the logical evolution of budgeting. You’ve grown that day/week/year-long spreadsheet into a plan that covers, say, the next five, 10, or 20 years.

A date is crucial not only in terms of realizing your retirement goals, but for the perspective it brings. You understand why you’re spending and saving the way you are. Your retirement date is a guiding light for both your actions and your emotions. It connects you to your future self.

5. You have enough money to cover six months of living expenses

Okay, yes, this is a number. Technically. You’re in pretty good financial shape if you have enough cash in the bank to live off of for six months—no income necessary.

Of course, what’s sufficient for six months varies from person to person, family to family. This milestone isn’t about being able to just barely scrape by. It’s important to have enough money to live comfortably—at a level similar to or above your current lifestyle.

Imagine if you had six months to live. What it would be like to quit your job? How would you spend your last days on earth? Would you have what you need financially to make the most of it?

Think of this mental exercise as a trial run for retirement. If you can live the way you want to live for six months on your own, you’re on the right track to be able to do it for decades.

6. You haven’t touched your savings in a year

…That is, you’ve added to your savings, but you haven’t taken anything out. No withdrawals. For a whole year. All 365 days.

Consider everything a year can bring—holidays, birthdays, trips, unexpected medical costs and emergencies, bridesmaids dresses, and so on. If you can leave your savings alone through all of that, you’ve proven to yourself that you have the fortitude to save effectively and live below your means.

Now do it again next year. And the year after that. It’ll get easier every time.

7. You’ve fallen off the wagon—or come close

Failure is an excellent teacher. For many people planning on retiring early, falling off the wagon isn’t a question of “if” but “when.” Ideally, the sooner, the better—but that big, unplanned-for expense can come along at any time.

Be ready for it—and be ready to learn from it. Getting off track with your financial goals will test the strength of your plan and help you reconnect with your purpose. It will show you what truly matters and whether you’ve been thinking realistically or not.

Failure (or near-failure) is also a test of your ability to bounce back and move forward. Life isn’t always convenient. That includes your pre-retirement and post-retirement life. Not even the largest nest egg in the world can shield you from mistakes or, more importantly, unhappiness.

The point here is that planning for retirement is about more than saving money. Prepare yourself mentally for the years ahead, and be ready for the unexpected—be it good, bad, or somewhere in between. Every setback you’ve faced so far is a notch on the belt.

8. You have a “me then” and a “me now”

Take a close look at who you are today. How have you changed since you first started on your financial independence journey? What have you learned? How have your priorities shifted?

If you can clearly differentiate who you are now from who you were then, you’ve made true progress toward financial independence.

Even if you’re still far away from your monetary goal, you deserve to recognize your achievements. You have a plan and are working toward it every day. You’ve developed skills and knowledge many people will never attain. You know what your dream life looks like and how to reach it. That’s more important than any number in your bank account.

9. You’re closer to where you’re going than where you were

What this last milestone means is up to you. Maybe you’ve simply saved more than half of what you need to retire. Or maybe you’re just a couple years away from financial independence after a long time spent working and living on someone else’s terms.

Regardless of how you track it, you’re further from where you started than you are to the life you want to live. You can do it. You’ve already done most of it. All you need to do now is cross the finish line.

No matter where you are in your journey, take the time to recognize and celebrate your achievements and milestones along the way. Give yourself a little morale boost and remind yourself of the tangible those numbers represent: all the spa days and cold beers you can afford when you’re financially independent.