An Early Retiree’s Perspective on Dave Ramsey’s Blueprint To Early Retirement

Retiring early is more than just a dream, it’s a reality that many people can achieve with the right plan. If you’re like me, you’ve thought about leaving the 9-to-5 grind before the traditional retirement age.
I am a Chartered Financial Analyst who retired at 42. I can tell you firsthand that reaching financial independence early is entirely possible. But it doesn’t happen overnight. It requires careful planning, discipline, and making key financial decisions along the way.
As I break down Dave Ramsey’s steps to early retirement, I will highlight how they align with my own financial philosophy. My goal is to offer you actionable advice to help you make informed decisions, wherever you are in your journey to early retirement.
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Why Listen to Me?

When it comes to personal finance, there’s no shortage of advice. So, why should you pay attention to mine? I’m not just another financial blogger tossing out theories. I’m a Chartered Financial Analyst (CFA) with over 20 years of experience in senior roles within the financial services industry.
More importantly, I walked the walk. I retired at 42, not because I hit the lottery or just mere “luck”, but because I followed a disciplined, strategic plan. I engineered it through smart investments, careful planning, and a deep understanding of the financial markets.
I’ve lived through the highs and lows of the market, experienced the ins and outs of real estate, and dealt with the realities of long-term financial planning. I’ve made the sacrifices, lived the discipline, and ultimately achieved the freedom I was after.
If you’re serious about retiring early, or just gaining control over your finances, you’re in the right place. Let’s walk through Dave Ramsey’s approach, along with my own strategies, to achieve early retirement and how you can do the same.
Step 1: Determine What Your Goals Are for Early Retirement

Before you start crunching numbers, you need to know what your retirement looks like. Ramsey is spot on with this advice. The vision you have for your retirement, be it traveling the world, spending time with family, or running a small business will directly affect how much you need to save.
Personally, I always emphasize the importance of visualizing your retirement. The clearer your picture, the more focused you’ll be on getting there. But here’s where I believe an added layer of introspection is key: assess your why. Your motivation needs to be more than just avoiding work.
What will drive you to stay disciplined when the road gets tough? For me, it was the desire to have full control over my time and to be deeply involved in raising my children. Once I nailed down that vision, everything else became easier.
Step 2: Create a Mock Retirement Budget

Ramsey suggests building a retirement budget based on today’s expenses, and I agree with this approach. It’s practical and keeps your planning grounded. But there’s something he misses, planning for inflation over decades. Prices won’t stay the same, and neither will your lifestyle.
When I created my own retirement budget, I went a step further. I broke it down into phases. I planned for the more active years when I wanted to travel, the mid-phase where I’d spend more time with family, and the later years when medical expenses could rise.
I actually just had this conversation with a cousin who is wanting to retire young. We talked about just looking at her rolling 5 years of expenses to determine her monthly spending needs. Then add a buffer for inflation.
Then I told her to look at the big purchases that haven’t happened in the last 5 years and add those together (e.g. new HVAC unit, how many new cards you’ll need the rest of your life, etc)
You need to make sure your budget can adapt, and this foresight helps prevent nasty surprises down the road. Retirement isn’t just one stage, it’s a series of evolving phases, each with its own unique set of financial demands.
Related: My Roadmap to Early Retirement: Achieving Financial Freedom on Your Terms
Step 3: Evaluate Your Current Financial Situation

Here’s where Ramsey’s Baby Steps align perfectly with his early retirement advice. You can’t plan your journey without knowing where you stand. Ramsey talks about getting out of debt and following his 7 Baby Steps, which is a logical foundation.
From my CFA lens, financial health is not just about being debt-free, it’s about understanding your cash flow, liabilities, and how they interact with your investments. When I started planning for early retirement, I treated it like an investment portfolio.
I analyzed my income streams, expenses, and even tax implications. Knowing how far you need to go starts with measuring the gap between where you are now and where you want to be. And the clearer you are on your starting point, the better you can strategize for the long haul.
Step 4: Invest in a Bridge Account

This is where Ramsey’s advice gets more sophisticated. If you’re aiming to retire before you can withdraw from tax-advantaged accounts like a 401(k) or Roth IRA, you’ll need a bridge account.
This account will cover you until you hit 59½, when you can access those retirement funds without penalties. It’s a smart way to avoid dipping into your long-term retirement accounts too early.
I appreciate this focus on building a bridge, but here’s where my philosophy diverges slightly. I believe in aggressively maximizing your tax-advantaged accounts first, max out that 401(k) and Roth IRA. Only after you’ve done that, would I suggest focusing on the bridge account.
I actually created a bridge account of sorts. I invested in real estate. My plan was always to make enough money in a taxable account to last me from my 40s to 60s. Ramsey calls that a Bridge account. I call it a phase.
It’s all about taking advantage of compounding interest within those tax-advantaged shelters as much as possible before shifting your attention. I think of my retirement accounts as “future me’s money,” and the bridge account simply covers that gap between early retirement and 59½.
A CFA’s Take on Dave Ramsey’s Baby Steps: A Young Retiree’s Comprehensive Analysis
Step 5: Invest in Real Estate

I’ve always believed that real estate can be a powerful tool for building wealth, especially in early retirement. Ramsey advocates for investing in real estate after you’ve paid off your primary home.
I did not do this. I think it’s ignoring the time value of money. I bought my rental houses in my early 20s. That way they would all be paid off in my 40s (which happened.).
I treated my personal budget entirely separate from my rental house business. They were two entirely different things…except for taxes. If I would have waited until my primary house was paid off I would not have retired until I was in my 50s or later. That seems counter productive. Invest in rental houses right away, but have them be a self contained business. Pay off your primary residence concurrently.
I spent over two decades in real estate investment, and it’s not without its challenges. I’ve seen people get lured by the promise of passive income, only to be hit with unexpected property maintenance costs or bad tenants.
Ramsey also talks about paying for investment properties in cash, I disagree. I actually bought my houses with a total of $800 out of pocket. I preferred a highly leveraged scenario and no down payments, because I knew the math was in my favor.
But make sure you’re prepared for the ups and downs that come with property management. Real estate can be a solid addition to your portfolio, but it’s not the only route to wealth.
Step 6: Get Serious About Lifestyle Changes

Here’s where Ramsey is brutally honest, and rightfully so. Early retirement requires serious sacrifice, both financially and personally. You can’t expect to retire early if you’re not willing to make significant changes in your spending habits.
I often hear people say they want to retire early, but their actions don’t align with their goals. If your dream is early retirement, you’ll need to live well below your means, and that’s non-negotiable. Cut the luxuries now so you can enjoy freedom later.
During my journey, I traded extravagant vacations for camping trips, cooked at home instead of eating out, and scaled back my entertainment budget. I drove the stereotypical Camry with 200,000 miles. I lived in a modest house.
Every dollar you save today accelerates your path to financial independence. Remember, no luxury now is worth sacrificing decades of freedom later.
Related: Stealth Wealth: The Key to Keeping Your Wealth and Your Freedom
Step 7: Play It Smart When You Retire Early

Retiring early is one thing; staying retired is another. Ramsey touches on the importance of making smart decisions once you actually leave the workforce. And he’s right. If you retire early, you’ll need to make sure your money outlasts you.
I always tell people that early retirement isn’t the finish line, it’s the starting point of a new phase of financial vigilance. From choosing the right health insurance to strategically drawing down your accounts, you have to play it smart.
Step 8: Meet Regularly with a Financial Advisor

Ramsey’s advice here couldn’t be more crucial. You may know your financial goals, but staying on track requires professional guidance. A financial advisor can help you navigate market changes, tax implications, and long-term planning strategies.
Financial advisors do more than just suggest investments, they help you think holistically about your entire financial life. As you inch closer to retirement, regular check-ins ensure that your plan is still aligned with your goals, your risk tolerance, and your evolving lifestyle.
I am a Chartered Financial Analyst with a lot of experience building the tools and advice systems that Financial Advisors use. I am an investment product expert. But I still have a Financial Advisor. I could do it all myself, easily. But I like having the second expert driving the car with me.
Your Path to Early Retirement

Dave Ramsey’s steps provide an excellent roadmap to get you there. While I don’t follow every aspect of his approach, the fundamentals remain the same: live below your means, invest smartly, and stay focused on your long-term goals.
The key to early retirement is building a strategy that fits your lifestyle and financial situation. There’s no one-size-fits-all, but Ramsey’s framework offers a solid foundation for anyone looking to break free from the 9-to-5 grind.
Ready to take control of your finances? With determination and the right plan, you can achieve financial independence sooner than you think.
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