Simplify Your Way to Semi-Retirement

Unfortunately, 64 percent of Americans aren't prepared for retirement. This isn't that surprising, given the fact that it's getting harder and harder to save money—even for an emergency fund, let alone retirement. But semi-retirement—leaving full-time work and the corporate world in order to work less, pursue your passions, but still earn a bit of income—may be one way to hack the system.

Sure, cutting back on work can feel like an impossible ask in today's economy (and hustle culture). What's one way to get there? Minimalism. In the words of minimalist expert Courtney Carver, "instead of working so hard to make ends meet, work on having fewer ends."

This quote is inspirational for many of us who are searching for financial freedom, but struggling to find it via traditional methods. What is it that we're striving so hard to achieve? Many of us want more time—to enjoy life, our family, and our fur babies. Rather than working your hours away for things you don't truly need, why not minimize your living to maximize your life? Here's how to simplify your life in favor of semi-retirement.

Pay your mortgage off early.

The key to financial security is owning your home free and clear. This way, no matter what happens, you will have a place to live. This is also the secret to an early retirement; the faster you pay off your mortgage, the less income you need to survive, and the more free money you have to semi-retire.

Paying off your mortgage can be easier than you think. For example, let's say you have a 30-year loan of an amount of $150,000 on your home at a 5.25 percent rate. According to this mortgage calculator by Bankrate, if you pay an additional $200 a month to the principal, you could pay off your home 10 years earlier and save over $50,000 in interest payments.

Even an extra $50 a month can save you thousands of dollars and shave years off your loan. Cut back on some frivolous spending and put that extra money towards your mortgage.

Downsize your home.

If your goal is to minimize your living and expenses, downsizing your home may be the way to make semi-retiring a reality. Not only is a smaller house more affordable, but it also costs less to maintain and probably requires less utility usage.

Some people are getting pretty creative with tiny living. Tiny houses, "skoolies," and container homes are a few fun ways to have a dream home that's paid off. You can sell your existing home and use the profit to buy something smaller. Downsizing your home is a perfect path to semi-retirement.

Less is more.

The less you own, the more freedom you have. Stuff costs money, whether it's already bought or not. For instance, clutter costs you money to store. Extra vehicles mean more payments, taxes, registration fees, and maintenance costs.

The more things you have, the more expenses you will accrue. Lightening your load and learning to minimize is essential for a simple lifestyle, which can make that sweet semi-retirement dream a reality.

Get out of debt.

How much money would you have to earn if you paid off all of your debts? Getting out of debt is the key to financial freedom. Paying off your car, credit cards, medical debt, etc., will free up funds that you can save for retiring. Also, not having regular payments owed means you can work less; after all, you won't have so many bills.

Create a debt payoff plan and use the SMART goal method to make it happen. This method helps you create specific and measurable goals within a specific time period. This way, you aren't dragging out paying off your debt, and you can accomplish your goal of semi-retirement sooner than later.

For example, let's say you owe $20,000 total in debt, and you want to be debt-free in three years. If you divide $20,000 by 36 months, you would pay $555.55 a month to reach your goal. To make it less psychologically overwhelming, break it down into weekly goals. Being debt-free is a huge step towards semi-retirement.

Earn passive income.

One hack for working less? Earning passive income. Investing, peer-to-peer lending, publishing ebooks—all of these are examples of passive income, aka work and money you put in once that will keep working/earning for you over time. After the initial set-up effort and cost, you continuously earn income from these sources.

For example, let's say you write and publish an ebook. The initial work of writing will be done, but you will continue selling books and earning royalties. Let's say you make $2 a book and sell 200 books a month; that adds up fast!

But don't forget: Straight-up investing your money is one of the best ways to earn passive income and build real wealth. You don't need a ton of money, either. You can get started investing with just $100 to make $1,000.