You don’t need millions of dollars to retire early, but what you do need is a plan and a good portion of money saved to continue living the same lifestyle that you are used to, and also to bridge the gap between when you choose to retire and the age at which you can claim retirement benefits from the government.
You can estimate the amount that you need to save for your retirement by calculating your actual disposable income. To do that, start with your nominal income – your complete before tax income – salary and otherwise. From here deduct what you pay in taxes and mortgage if you are making payments. Subtract your retirement contributions, your savings for your kids’ education, and any job related expenses. This will leave you with your real disposable income – this is the amount of money you should have as a target income for your retirement.
At 65, government benefits will replace some of this disposable income, but if you want to retire before 65 then you will have to rely on your savings for income between when you retire and 65 years of age.