How to Retire Early When You’re Feeling Burnt Out: A Guide for Daycare Owners

Running a daycare is rewarding but can also be physically and emotionally draining. If you’re feeling burnt out and longing for more freedom and time to enjoy life, you’re not alone. Many business owners in high-stress industries dream of retiring early. I have been running my daycare in my home for over 10 years and I am exhausted. Parents and caregivers need to begin taking away electronics before we destroy our youth. I have decided to get into writing full time and take my masters in creative writing to advance into copywriting, editing or other similar careers. I will always write on my personal website but to pay the bills I will have my professional spot as well. Making this decision takes a lot of work. While it’s a significant transition, it’s entirely possible with the right strategy in place.

If you’re ready to downshift and live a more peaceful life without financial strain, it all comes down to planning and a focused approach to saving, reducing debt, and investing smartly. Here’s how you can take actionable steps to retire early.

1. Assess Your Current Financial Situation

Before you start making drastic changes, take a thorough look at your finances. You can stabilize your budget and finances and ensure you have funding for your next adventure without stress of making ends meet. This will give you a clearer picture of what needs to be done in order to retire earlier than you originally planned.

• Net Worth: Calculate your total assets (savings, investments, home equity) and subtract your liabilities (debts, loans, etc.).

• Income and Expenses: Review how much you’re earning from your daycare and how much you’re spending. Is your income sufficient to save for retirement after your living expenses?

2. Create a Retirement Budget

Once you’ve assessed your finances, create a realistic budget for your retirement. Consider:

• How much you’ll need annually to cover your living expenses.

• Future healthcare costs.

• Any other lifestyle goals (travel, hobbies, etc.).

A general rule of thumb is that you will need 70-80% of your pre-retirement income to maintain your lifestyle after retiring.

3. Start Saving Aggressively

If you want to retire early, you need to save as much as possible in the shortest amount of time. Here are some strategies to help you build your retirement fund faster:

• Automate Savings: Set up automatic transfers to a high-interest savings account, IRA, or 401(k) so you save consistently without thinking about it.

• Emergency Fund: Make sure you have a solid emergency fund (3-6 months of expenses) before focusing on retirement savings.

• Cut Unnecessary Expenses: Review your spending habits and cut down on non-essential costs. Do you really need all those subscriptions or daily coffee runs?

• Downsize: Consider downsizing your home or living situation to reduce mortgage or rent payments, freeing up more money for retirement savings.

4. Pay Down Debt to Free Up Cash Flow

Debt can be one of the biggest obstacles to early retirement. Here are the key debts to focus on paying off to improve your financial situation:

• High-Interest Debt (Credit Cards): This should be your first priority. Paying off high-interest credit card debt will save you money in the long run and reduce stress.

• Business Loans: If you’ve taken out loans to fund your daycare, work on paying those off as quickly as possible. Less debt means fewer monthly obligations.

• Personal Loans & Lines of Credit: Pay off any personal loans or lines of credit next, especially those with high interest rates.

Once you’ve cleared these debts, you’ll have more disposable income to invest in your future. You can create a plan for retirement that leaves you with plenty of options. You may wish to start a whole new business, work outside the home, or stay at home for good. If that’s the case you will need to have income of some kind so think about how that is going to happen. 

5. Maximize Retirement Accounts

Utilize retirement accounts that offer tax advantages to grow your savings faster. Focus on the following accounts:

• 401(k): If you have a 401(k) plan, contribute as much as possible, especially if your employer offers a match. It’s free money!

• IRA (Individual Retirement Account): Contribute to an IRA for additional tax-deferred growth. You can choose between a traditional IRA or Roth IRA depending on your tax situation.

• SEP-IRA: If you’re a self-employed business owner, consider setting up a SEP-IRA. You can contribute much more than a traditional IRA, which helps accelerate your savings.

6. Consider Passive Income Streams

If you want to retire early, relying on a paycheck from your daycare business isn’t enough. You’ll need to create other sources of income that require little to no effort once established. Some options include:

• Rental Income: Consider investing in real estate and renting out properties for passive income.

• Investing: Invest in stocks, bonds, or mutual funds that generate dividend income.

• Online Business: Start a side hustle or passive income business that can run with minimal effort, such as selling digital products or creating content.

7. Review Your Business

Since you’re running a daycare, one of the quickest ways to retire earlier might be selling or scaling down your business. Some options to consider:

• Sell Your Daycare: If the stress of daily operations is too much, consider selling your daycare. You could use the proceeds to help fund your early retirement. I will be selling all of my equipment and toys to pay off debt and start a savings fund for my future. 

• Hire a Manager: If you’re not ready to give up the daycare entirely, you could hire a competent manager to run the business while you take a step back. This will reduce your workload and stress levels. If you have a home daycare this may be a harder task but you can still do it, you just need to be very comfortable with another person running your home. 

8. Invest in Health Insurance

Retiring early means you’ll need to figure out your health insurance, especially since Medicare won’t kick in until you’re 65. Consider these options:

• Affordable Care Act (ACA): Look into the ACA marketplace for health insurance plans if you retire before age 65.

• Health Savings Account (HSA): Maximize contributions to your HSA to cover healthcare expenses once you retire.

9. Track Your Progress and Adjust as Needed

Retiring early is a long-term goal, so it’s essential to monitor your progress. If you find that your savings aren’t growing as fast as you hoped, it might be time to adjust your spending, increase your savings rate, or even find ways to increase your income. My goals are to not retire completely but retire from the business, I need to do something I am passionate about, I am now very intrigued by writing careers and making my own hours without anyone telling me what I can and cannot do. Being licensed is a lot of work and there are so many rules and regulations, it’s not just doing things your own way ever. I need some freedom, and it’s showing in my energy levels at work. 

Final Thoughts

Retiring early is a bold but achievable goal, especially if you’re feeling burnt out and want to step away from the daily grind and find better balance in everyday life. By being strategic with your finances, cutting unnecessary expenses, paying off high-interest debt, and growing your retirement savings, you can enjoy the peace and freedom you desire in your later years. I had a great time raising my kids at home with the opportunity to create this career but it’s now become nothing but work and I am no longer having fun. My kids are teens and just want peace and quiet, so do I. 

Remember, early retirement is not an overnight achievement—it’s a result of careful planning and consistent action. Take it one step at a time, and soon you’ll be on your way to the lifestyle you’ve always dreamed of.