How I'm Planning to Retire in my 40s (without extreme frugality)

You (probably) don't have to work until you're 65!

Author

Michela Allocca
August 12, 2025

🚨 Get started on your personal finance journey with one of my budgeting tools! Check out the Personal Finance Dashboard and the Basic Budgeting Template! 

What to expect in today’s newsletter (4 min read)

  • What is FI/RE and what are the types?

  • What am I working towards?

  • Why knowing. your FI/RE numbers matters

MONEY
My Plan to Retire Early (in my late 30s or early 40s)

Earlier this year, I crossed a major net worth milestone — and the #1 question I got was: "Are you planning to retire early?"

For a long time, I thought the FI/RE movement (Financial Independence, Retire Early) was all about extreme frugality. And to be honest… that is just not my vibe.

But after taking a closer look at it and crunching a few numbers, I realized there are different types of FIRE — and some of them fit my lifestyle pretty well. I’ve even already hit one of them!

🛍️ What is FI/RE?
FI/RE stands for Financial Independence, Retire Early and is about building enough wealth so you can choose how and if you work — decades before traditional retirement age.

I actually received a comment on my recent Youtube video where she reclaimed the /RE as “Recreational Employment” and I LOVE this because it perfectly encapsulates how I feel about the FI/RE movement overall.

There are several variations:

  • Lean FIRE: Living on less, needing a smaller retirement number.

  • Fat FIRE: Living large, needing more saved.

  • Coast FI: You’ve invested enough for retirement, so you can stop contributing and just let it grow.

  • Barista FI: Partial retirement — part-time work + investments covering the rest.

Where I’m Currently at:
My ultimate goal is to avoid going back to a traditional 9-5 job. So while I am building Break Your Budget, I am aiming to save and invest as much as possible.

✅ I’ve already achieved Coast FI.
🎯 I’m now working toward Barista FI so I can work less in my 30s and 40s, without sacrificing my lifestyle.

💸 Behind-the Scenes of my FI/RE Plan:

Here’s what I’m focusing on right now to get there:

  • Tracking my expenses weekly so I never drift too far from my targets. I often share updates about this on my Instagram if you need a reminder to do this :)

  • Annual spending target: ~$72; this is actually a higher estimate than where I will likely land in spending ($60-$65k is my target this year!)

  • Annual savings target: $30K, broken into monthly goals that I build into my Personal Finance Dashboard

  • Lifestyle choices: Staying in a smaller space while I’m able to, and I aim to keep my fixed expenses steady.

  • Investing in traditional retirement accounts for tax advantages now, knowing my tax rate will be lower later (because of my business)

Why Running Your FI/RE Numbers Matters

A part of FI/RE that we don’t talk about ENOUGH is the layer related to career planning. Yes - the goal is to stop working. But I actually think a lot of us would be perfectly happy to continue working - just working differently.

The beauty of achieving financial independence (in any capacity) is that you can use these targets to help with your career planning and decision-making.

For example - let’s say you reach your Coast FI target - you no longer need to save for retirement, so you may be able to quit your job and swap to a lower-pressure job or a job you enjoy more where you earn a little less money.

Reaching Financial Independence looks different for everyone - but it can give you:

  • Career flexibility

  • Reduced financial pressure

  • Time for hobbies, family, or passion projects

I look at financial independence as my plan to buy back my life and create flexibility in my choices. You can choose your career path - but it may involve a few years of sacrifice!

If You’re Looking for More

I take you through my full FI/RE Plan breakdown this week on youtube! I share more details around the types of FI/RE and illustrate my plan and thought process.

If you’re interested in getting started on your FI/RE Journey, I have a few resources to consider:

  1. If you don’t already know both your current annual expenses and your net worth, that is the first step. You can calculate this information using The Personal Finance Dashboard or the Basic Budgeting Template!

  2. If you are ready to calculate your FI/RE numbers, check out my FI/RE Planning Template!

WEEKLY RECOMMENDATION

The job market is feeling… bad lately. If the numbers are not good. There were some pretty serious cuts to job forecasts recently, and the WSJ did a great job of outlining what the job market is looking like. I also created a video breaking down some of these numbers and shared some tips on what you can do - whether you’re looking for a new role of not!

RESOURCES
What’s Happening This Week at Break Your Budget

  • This week on Don’t Depend on Daddy: We’re talking content creation and social media strategy! A bit different than my usual content, but I have received so many questions I thought it would be best to aggregate all my best content and social tips into one video.

  • My FI/RE Plans: If you enjoyed this newsletter and want more details around how financial independence and how I am applying these concepts to my own life, check out my latest video on youtube!

LOOKING FOR MORE?
Check out ALL of my Money & Career Resources!

xoxo,

Michela