Ariana Schleisman’s coworkers in Portland, Oregon, stood over an office garbage can, cut her shoes to pieces, and threw them away. Strange as it sounds, this was a celebration.

Schleisman had been paying off student loan debt so aggressively that she refused to buy new shoes, keeping the old ones together with glue for years. The shoe-carving feted her final student loan payment.

It’s all part of how Schleisman, 31, a marketer, and her husband, Ted, 33, an actuary, live frugally with the goal of financial independence before age 50.

You may have followed news coverage about the Financial Independence Retire Early (FIRE) community. FIRE has spread among millennials, fueled by America’s economic expansion and disciplined practices such as dedicating up to 70% of yearly income to savings. “Super Savers” borrow ideas from the FIRE community—as well as their parents and other traditional financial planning methods.

“I want to enjoy that kind of freedom where, if the worst were to happen, my family and I could go into retirement comfortably,” Ted says.

How to retire at 50?

The Schleismans borrow from the FIRE ethos and traditional sources to fuel their strategy.

1. Trim expenses and live below your means.

One of the couple’s first big shifts was to relocate from their pricey waterfront high-rise condo in Portland. First, they chose a more affordable neighborhood, then a less expensive city, and ultimately—amid the pandemic—a dream move to the Denver metro.

“Many people see the latest move and think our cost of living must have increased substantially, but this couldn't be further from the truth,” Ted says. “Yes, our house's price tag is significantly higher, but factor in the lower property taxes, and our overall monthly payment is only up about $200. Meanwhile, our income has increased without a comparable increase in expenses.”

The Schleismans also continuously “churn” credit cards—cycling through different providers to earn sign-up bonuses that cover all their vacation airfare and hotels. “2020 ended up being a great year for accumulating credit card points,” Ted says, “which sets us up for some great vacations in the next couple of years.”

Dreaming of being a “Super Saver”? See how they do it.

2. Max out your 401(k).

Both Schleismans take full advantage of their employer’s matching contribution and hit the IRS annual $19,500 maximum allowance for 2021. Free retirement savings, like the employer matches, helps shorten the FIRE timeline.

3. Add a Roth IRA.

For those within the IRS income limit, this after-tax method of retirement savings is a solid opportunity to save even more. Account growth isn’t taxed, and neither are withdrawals.¹

4. Take advantage of a health savings account (HSA).

Maxing out a HSA contribution (IRS limits for 2021: $3,600 for individuals, $7,200 for families) lowers taxable income while paying for qualified medical expenses with pretax money. This helps buffer the impact of a high-deductible health plan. Any interest earned also is tax-free, and amounts not used roll over from year to year—meaning you can use it to support future health care expenses.

5. Open a brokerage account.

The Schleismans aren’t comfortable with the risks and time burden of owning real assets, such as a rental property, so they invest in stocks and bonds. “This is a personal preference more than a choice made 100% on maximizing income or cash flow,” Ted says. The “more vanilla” investments, as they put it, are most sustainable for them.

6. Organize a budget.

Budget clarity and regularity is essential. Their take-home pay is distributed to:

• an account for family expenses such as their mortgage and utilities,
• an emergency fund —96% of “Super Savers” have one²—with up to a year’s worth of necessary expenses,
• a brokerage account, and
• individual allowances.

Most of these contributions can even be automated. “We've got things mostly on autopilot, and we make a point not to tinker too much. It's essentially just a matter of time until the financial independence part of the equation is reached,” Ted says.

7. Don’t neglect individual allowances.

FIRE frugality isn’t for the fainthearted and has a better shot to work with the deliberate pressure-release valve of an individual allowance. “That money is for whatever we want, no judgment,” Ted says. “If we want something big, we save for it ourselves—no taking from the family pot.” They started small with $20 per paycheck and now routinely deposit a couple hundred dollars apiece.

8. Enjoy the journey.

Yes, the Schleismans drove hand-me-down cars from their parents until they rattled apart. But they also bought a new one before their daughter was born. And they purchased a comfortable home with enough room for their family. Not everything in their life is reduced to a savings strategy. “We have our expenses dialed. They aren't rock bottom because we wish to enjoy the ride to financial independence, but they are well below our means,” Ted says.

Ariana Schleisman holds their daughter Georgia, then 16 months old. Georgia should be no older than 20 when her parents retire.

The Schleismans guide themselves toward retirement with a financial formula: They’ve anticipated what they might routinely spend as retirees, including a downsized home (possibly a rental) and no more than one car. Their overall target savings, Ted says, “allows for a 4% annual withdrawal rate, which may be appropriate for the vast majority of projected market returns.”

But there’s no formula to precisely map their feelings on retirement. What will be important to them when they reach 50? They crave the freedom and security of financial independence, but they’re willing to let their notions of retirement come into focus gradually.

“My time becomes the currency, and I want to dedicate that to the things I believe in and the places that need it,” Ariana says.