How to make early retirement a reality

The idea of early retirement can be exciting. Time to read the morning paper cover to cover... time to become an expert at brewing your own espresso... time to swim laps at the gym and relax in the spa... and that’s all before noon! To achieve that glamorous lifestyle, though, you may have to make more frugal decisions now.

Retiring early requires sharpening your focus on three things: smart spending, disciplined saving, and strategic investing. You need to do these three things no matter when you want to retire, but they’re even more important if you plan to retire early.

Smart spending

• Review your monthly expenses and create a budget. Better yet, make a note of your weekly or even daily spending habits to track where every dollar goes. Find ways to cut current costs by cooking dinner at home instead of dining out or saying “no” to a pair of shoes you want but don’t need. Shop sale racks and use discounts and coupons whenever possible.
• Use public transportation instead of driving. And forget leasing a new luxury car—buy a used vehicle if you really need one. If possible, ditch the car altogether to spend less on getting around.
• Take steps now to decrease your living expenses in retirement. For example, see what you can do today to minimize or eliminate that expense before you retire. Can you pay a little extra each month to draw down your mortgage principal faster? Would you consider moving into a smaller, less costly home?

Disciplined saving

• Are you planning for 30 years of retirement or 40? The amount you’ll need to have saved varies based on how early you retire. Make sure that your financial plans and retirement age realistically match with your anticipated retirement lifestyle. To better understand your retirement savings needs, check out NetBenefits^®.
• It sounds simple: the more you save and invest on a regular basis, the more you may accumulate over time. Here are a few tips to help you maximize your savings:
  • Make sure you contribute enough to the Hewlett Packard Enterprise 401(k) Plan to maximize the Company match. Hewlett Packard Enterprise will match 100%* of the first 4% of pay you contribute. Learn more by reading Save more with the Hewlett Packard Enterprise 401(k) Plan.
  • In 2026, the annual limit on 401(k) contributions is $24,500, but you can also open an IRA to save even more—up to an additional $7,000 in 2026.
  • If you’re 50 or older, save another $8,000 in catch-up contributions to help achieve your retirement savings goals faster.
  • Keep in mind, withdrawing from a 401(k) plan before age 59 ½ could result in tax penalties.

Strategic investing

• Having a diversified portfolio is important at any age. When you’re young, consider investing more aggressively with equities or other potential high-yield investments to grow your portfolio. When you’re closer to retirement age, consider investing more conservatively to protect your capital. For example, you may want to shift some of your equity investments to bonds and short-term investments like CDs or money market funds.
• Because of inflation and the decrease of monetary value over time, you’ll want to consider the average annual inflation rate of 3% when determining an acceptable target return rate. Make sure to review your investment mix at least once a year, as the mix that worked well for you last year may not keep its pace as economic conditions change.

Now that you know what you need to take into consideration for a major life decision like early retirement, start planning! Take advantage of My HPE Financial Wellness resources to help you spend, save, and invest smarter.

^*Any matching contributions are made to your account at the end of each calendar quarter.

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