Some people could keep working for their entire lives, but others dream of retiring early. If you’re in the latter camp, the good news is that early retirement is possible. Sure, it takes financial discipline, and you’ll probably have to make some changes in your spending and saving habits. But you don’t need a million dollars to be able to quit working.

How much do you need? To determine the answer, you’ll require a comprehensive financial plan that lets you see the big picture and addresses all the small details. There are many factors to consider. Let’s take a closer look…

What’s your number?

You can’t have an unmeasurable objective like “retire early.” In general, the steps required for someone to retire early in five years will be different than those required to retire early in 15 years. The first step to planning ahead for early retirement is to set a realistic retirement date. Then you can begin the process of working to achieve it.

How much will you need?

A widely accepted rule of thumb suggests you’ll need 80% of your pre-retirement income to maintain your current standard of living. But a recent survey of U.S. retirees by global investment giant T. Rowe Price found that, nearly three years into retirement, respondents were living comfortably on just 66% of their pre-retirement income.* To be certain about your financial needs, you’ll have to create a retirement budget. Be as detailed as possible – and don’t forget about the expenses that you might pay only quarterly or annually.

How much do you have saved?

Odds are not enough. Otherwise, you’d be off sailing or sunning yourself on a beach at this very moment! If you need to save more aggressively to achieve your goal for early retirement, it’s imperative that you find ways to reduce your current expenses. For instance, you could dine out less frequently, scale back your vacations and postpone buying that new car. The objective here is to save as much of your discretionary income as possible each year until your retirement. It won’t be easy, but trimming your spending now is the only way to have a realistic shot at retiring early.

Do you have expenses related to your kids or their education?

If the answer is yes, you’ll need to account for your current and future expenses in your financial plan.

Are you still paying off debts?

Carrying debt into retirement was once considered dangerous and irresponsible. But today’s low interest rates have changed the game – as long as you borrow smart. Also, if you’re still paying off your mortgage, consider downsizing to both reduce your debt load and free up cash to invest.

Next steps

Maximizing your investments

Once you’ve identified the key challenges you face, the question becomes how to overcome them. And one of the most important steps is deciding where to invest your money. Because the bulk of you nest egg’s ultimate value will come from investment growth, not your initial savings.

For most people, the answer will include a greater emphasis on growth-oriented investments. Plus, the more you can set aside and the sooner you do so, the faster your savings will grow – particularly when we make the most of your Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA). Outside of registered plans, we’ll take a strategic approach to minimize tax consequences.

When considering the growth-oriented options that are best for you, your risk-comfort level will be a key factor as will your time horizon. Our goal is to get as much growth as possible while keeping volatility within your comfort zone.

The old saying is that if you fail to plan then you’re planning to fail. Achieving the dream of early retirement starts with creating a comprehensive financial plan. If you’d like to talk about the possibility of early retirement, I’d be happy to review your plan and see what kind of adjustments might be needed.

* T. Rowe Price, “First Look: Assessing the New Retiree Experience,” July 29, 2014