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Can’t retire early? Consider semi-retirement.

Semi-retirement is a period of life before full retirement where you work part-time and enjoy your extra free time. The semi-retired lifestyle gives you the chance to enjoy life while you’re still young — and still maintain income and positive cash flow. It ensures you don’t dip into savings and can continue to let your retirement funds grow.

We’ve written a lot about how to semi-retire, including this guide on the best semi-retirement jobs. In this article, we cover how to semi-retire more quickly. Of course, this includes maximizing income but there are more strategies you can employ to speed up your path to financial independence.

The 4 tips below provide a strategy to accelerate your path to semi-retirement. Use all of them, or even just a few of them, and you’ll be in better financial shape to semi-retire much sooner than anticipated.



1. Invest, invest, invest!

A long-standing personal finance rule is to keep 3—6 months’ worth of living expenses in the bank. This is insurance to cover your bills if you get laid off, can’t work, or have other life events arise.

Any extra savings beyond that should be put into retirement plans, such as your company’s 401(K) plan, an individual IRA, or Solo 401K (if you’re self-employed or own a business that’s just you). If you want to be able to withdraw some cash during semi-retirement, other investment funds can be used in addition to your retirement funds, such as:

  • Real Estate Investment Trusts (REITs)
  • High-Yield Dividend Stocks
  • Mutual Funds
  • Exchange-Traded Funds (ETFs)

The value of investing your savings can’t be understated. For example, let’s say you semi-retire with $400k with a part-time job to cover your lifestyle expenses. If you invest that money in an ETF that delivers an average of 10% returns, you’ll have $1,670,889 after 15 years. How amazing is that?

Read our article on semi-retirement investment funds here.

Disclaimer: This content is intended for informational purposes only. Please DO NOT consider any content as investment, financial, legal, tax, or other advice. With any investment, past performance does NOT guarantee a certain future performance. Seek advice from an independent financial advisor before making any investment decisions. 

2. Use Geoarbitrage to Save More Money

Geoarbitrage involves relocating to an area with a lower cost of living—all while making the same amount of money. Long a tool of digital nomads to boost savings, the rise of remote work during the pandemic has made geoarbitrage a possibility for many workers.

Consider this example to understand the financial potential of geoarbitrage, and how it can accelerate your path to semi-retirement:

  • Let’s say a family of four moves from San Francisco to Mexico City. The goal is for the parents to semi-retire more quickly.
  • The family of four net $120,000 annually in income, after taxes. The work is remote. However, living expenses are so high in San Francisco that they spend $9,000 per month ($108,000). They only save $12,000 per year for retirement.
  • By working from Mexico City, they reduce lifestyle expenses while still making the same income. Their monthly budget decreases to $3,500 monthly ($42,000 per year). That means they save $78,000 per year for retirement.
  • A move from San Francisco to Mexico City increases savings by 6.6 times for this family of four (from $12,000 to $78,000).



Do we have your attention now? Geoarbitrage is indeed super interesting. Read our guides below to find out more info:

3. Optimize Your Personal Budget

Almost 30% of Americans don’t budget, simply because they feel they don’t need the tool. Don’t be like that 30%. Everyone can use a budget, even the ultra-wealthy.

After all, if you don’t budget properly, you’ll spend more and save less. That won’t help you to semi-retire more quickly.

Don’t think of budgeting as a constraint on your lifestyle, but rather a way to understand how much you can save and if there is a savings gap. If you have a savings gap for semi-retirement, the right budget can clearly show you how to close the gap: eliminate unnecessary expenses and/or increase income.

A few types of budgets you can try to accelerate your path to semi-retirement include:

  • Zero-Sum Budget: This puts every penny of your income to use (i.e. you give every dollar a job). For example, if you make $7,000 per month, you may allocate $3,500 for housing, utilities and food, $1,000 for entertainment, $1,000 to pay off debt, and $1,500 for savings. Each dollar is put to work immediately!
  • 50/30/20 Budget: With this budget, you allocate 50% of income to needs, 30% for wants, and 20% for savings and debt. Feel free to customize the percentages to fit your needs. For instance, if your income goes up but lifestyle expenses remain the same, it would make sense to put more than 20% towards savings and debt.
  • Envelope Budget: This budgeting method involves dividing your budget into expense categories and putting limits on each category. Then, you allocate cash to each category as your income comes into your bank. Folks used to physically put cash into envelopes but you can track this all digitally now. It’s a great way to ensure you don’t overspend!

Read more about budget ideas for digital nomads and remote workers.

How to Semi-Retire Quickly: 4 Ways to Accelerate Your Path to Semi-Retirement - Overemployment - Frayed Passport

Photo by Goran Ivos on Unsplash

4. Become Overemployed

We’re not talking about side hustles that make a few extra bucks. Overemployment means working two full-time remote jobs to maximize income, boost savings, and reach financial freedom sooner.

With overemployment, you typically make double the income you’ve been making, which means you can supercharge your path to semi-retirement. Consider this example:

  • Sherry works at Company A, a fintech company, as a marketing manager. She makes $100,000 per year and saves $15,000 per year.
  • Sherry gets another job at Company B, a travel company, as a marketing specialist. She makes $90,000 per year and saves 70% of that gross income. That means she saves $63,000 per year from this job.
  • By becoming overemployed, Sherry boosts her annual semi-retirement savings from $15,000 to $78,000 per year.

As you can see, if you want to semi-retire more quickly, overemployment is a strategy that could accelerate your path there by a decade (or even more!). Of course, juggling two jobs is tricky and you need the right approach. For tips on how to do it, read our guide to overemployment.

Getting to Semi-Retirement as Quickly as Possible

Semi-retirement can enable you to spend more time with family and friends, travel the world, enjoy hobbies and more—all while ensuring your nest egg continues to grow. It’s certainly a life worth pursuing while young!

In addition to employing some or all of these strategies here, you should have a clear number on how much savings you need to semi-retire. Is $500,000 enough or do you want to be a millionaire before semi-retirement?

Once you have a number, think about what you can do to accelerate your path there, such as geoarbitrage and investing more. You should analyze common ways to maximize savings and income, such as:

  • Only buying used cars and cycling and using public transit when possible
  • Limiting unnecessary purchases of clothing, dining and entertainment,
  • Paying off debt ASAP and not taking on any more debt (other than a mortgage)
  • Lowering travel expenses with credit card points, off-season trips, etc
  • Working a side hustle to earn some extra cash

Good luck on your path to semi-retirement. If you have any more ideas on how to semi-retire more quickly, share with ​​Frayed Passport on Facebook.

About the Author

Nick Callos has always had a passion for reading, writing, and discovering the new and unknown. Originally from Cincinnati, Ohio, Nick holds a Bachelor’s Degree in English from Boston College. He currently splits his time between his hometown, Chengdu, China, and the open road. A full-time travel writer, Nick hopes his work can inspire others to explore the world more deeply and enjoy the digital nomad lifestyle.

Featured image by Brad Barmore on Unsplash

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