How I retired early as a single woman and live on just $18k a year


Three years ago we first profiled seven Aussies who are working towards early retirement.

Money caught up with them again to find out how their plans and investments have fared during COVID-19.

Read more about the early retirees who know there's more to life than work, and how to be inspired by the FIRE movement.

joanna jones FIRE early retirement

NAME: Joanna Jones*, 63
INCOME: $18,000 per year
INVESTMENT  STRATEGY: Switching from direct shares to diversified index funds, increasingly in different parts of the world.

Joanna has been retired for 12 years and, remarkably, she still isn't eating into her capital. In fact, her invested amount has grown by 20% over the past decade as she takes a limited income stream from her savings.

This is one of the miraculous features of retired FIREs.

Once you have accumulated your savings, it is possible to live off the income stream without touching the capital. Some years the capital goes up more than spending. But it all depends on living according to your means and not exceeding your income too much.

"Since I don't spend all the money I need to take out each year, my stash has been growing most years. There were a couple of years when it went backwards," says Joanna.

To make early retirement work, you need to live within your means, she says.

"For some people this is extremely hard. I've almost never been in debt. I paid off my first house within five years, and when I moved I paid cash for my current house."

Joanna has relished a frugal life, buying a cheap, unrenovated house in the inner city close to public transport and eventually a small second-hand car. She renovated her house gradually, one room at a time, when she had extra money and she drove her car until it stopped working.

Joanna lived on around $18,000 a year - and still does - and paid off her mortgage at the same time as she was retrenched.

As she told us in 2018, she always focused on her super, contributing extra to boost her retirement savings. In the days before concessional contributions were capped at $25,000, Joanna was able to put 70% of her salary into superannuation.

Part of the redundancy included some financial advice. The financial planner asked her how much she spent every year, and when she said $18,000 he said she could retire tomorrow.

"It took me a while to believe him," says Joanna. "I got a few months off work and spent that time making really sure all the figures were right and then retired at 51."

Leaving work meant she didn't spend as much. In fact, Joanna has been thinking that she could have probably retired sooner with a smaller amount of money. "But I'm content with the decisions I made."

Joanna says the fact that an ordinary person like her can be financially independent is enlightening.

"It doesn't take enormous wads of money - in fact, the people with wads of money seem to have a much harder time saving it."

Retirement is fulfilling for Joanna.

"The last two years have been good years. I've made more friends, finished some projects, decluttered, travelled to wondrous places, lost weight and I've got fitter.

"I've been doing a lot of local exploring with a good friend who I made through the FIRE community. We've been to a lot of local Aboriginal sites - ochre mines, ring trees, axe grooves and other special places - that are really world-class."

Joanna has been hiking to all the local national park peaks and is using the time to get her garden working better.

"I've always grown a lot of fruit and vegetables and preserved the harvest. I've decided to branch out into bush tucker plants. The bush tucker plants are also mainly permanent, so I expect that I'll have less gardening to do, with a lot of interesting flavours."

Joanna is a skilled craftsperson and went to a masterclass overseas before COVID hit. She makes her own clothes.

Since 2018, Joanna says the early retirement community has matured a lot and many people who were still working then are now retired. "As a result life is more interesting, as I can visit friends and they can visit me," she says. She had her last overseas FIRE guest in February last year.

Joanna keeps a couple of years of living expenses in cash, so she doesn't need to convert any paper losses into real losses. She has gradually been moving from individual shares to index funds.

"Each year, as my investments have grown, I've diversified a little more, into other parts of the world, or different sectors, as my understanding of them increased and it made sense given the economic climate to move in that direction."

*Not her real name.

Joanna's tips

She believes you need to look at your expenditure and work out how to optimise it.

This can mean reducing what you spend, but it can also mean spending money to save money. For instance, buying a solar system to cut electricity costs or deciding that something is very important to you and you want to spend more (for instance, on better equipment) to pursue it more deeply. Joanna had an energy audit done on her house and gradually carried out some of the suggestions, halving her utility bills.

She says it's important to understand what you're investing in and why, rather than just doing as you're told or what other people are doing.

Get stories like this in our newsletters.

Related Stories

Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.
Nat S
June 5, 2021 11.26am

But it doesn't explain how she is able to live off $18k a year. How is that possible? That's what I really want to know, and I'm sure others do too. And I'd also like to know how she covers the big expenses, like the solar panels and masterclass overseas. I assume they aren't part of the $18k. With normal everyday living expenses I can live fairly cheaply too, but I don't take frugality to extremes, as I like a nice holiday each year and that can sometimes be $15k+ depending on the destination and how long I travel for. What I'm getting as is it's all good and well to say I can live cheaply but what happens when the big expenses arrive. How do they cope without having to make a huge withdrawal from their capital? I know I've got enough to allow for travel etc... but have they??

June 5, 2021 11.52am

The single pension is only a bit higher, at $24k.

$15k holidays are not the only option. A week staying with friends or family is equally a break and $14000+ cheaper.

You could fly to Europe for $330 pre-covid if you accept slow connections and small seats.

Solar panels are cheap, $3k would easily install a system that covers a single persons power needs, and likely pays them extra from feed in tariffs.

Paying people to do things for you, like cook your food, clean your house, fix things is costly. If you have 40 hours a week extra compared to a worker, why not spend some cooking, gardening, crafting?

It amazes me so many people accept the marketing driven social media lie that only a costly life is worth living. Spend some time looking into how you live, and you might discover there are better options.

Nat S
June 5, 2021 1.03pm

Thanks for that info, but still doesn't really answer my quesitons. Where does the $3k come from for solar? And feed in tariffs are pathetic these does compared to the 60c/kwh they once were so I doubt they are making money from it. And I see how they maintain a frugal lifestyle... stay with family and friends as you suggest. Cheap holiday for you, and you pass on the living costs to someone else

Solar Pannel
June 5, 2021 5.03pm

Solar would be an investment from capital. The main reason you'd install it is to reduce cost of electricity sourced from the grid. The old subsidised feed-in tarrifs are not really needed any more. Staying with people has pretty limited incremental cost for the host. Newstart is $16k and people are expected to pay for accomodation out of that too. Most people spend 1/3 of their income on housing but with a paid off house the costs are much lower.

Nat S
June 6, 2021 10.27pm

Thanks for the useless info Solar Pannel

What's Newstart got to do with Solar?

I get why people would install it... I installed Solar years ago. I just want to know where the money came from.

I think in alot of these FIRE articles the right questions weren't asked. Or if they were, then they weren't answered. The main one being for those who associate FIRE with Frugality, how do you live so cheaply? I think it's a pretty simple question, that isn't answered, and following on from that, how do they pay for big one-off items?

Karel Baum
June 7, 2021 10.13am

As it says, she is drawing a small income stream from her capital - which is obviously still growing - thus I imagine this is where the $ for the one-off expenses comes from.

Dan H
June 15, 2021 9.53pm

If people can survive on Newstart at 16k/year then a retiree can probably survive on 18k. I think that was the point, nothing to do with solar.

To pay for big one-off items, they would need to save for it. My guess is their living expenses are 15k/year, so they have 3k for discretionary spend like renovating one room at a time.

Elle La
June 17, 2021 5.34am

Bloody hell. No need to be so rude and obnoxious. Good luck getting your answers with such a vile tongue and condescending attitude.

Michael Burgess
December 29, 2021 4.53pm

I think the thing is that people living on the FIRE principles grow / catch a lot of their own food, have solar power, own their house so for a single to live in under $150 a week is attainable. Then they have the remaining $8-10k a year for any one off expenses or travelling out of their area. What the principles show is how getting your required spending as low as possible means you can retire early. If you look all of these people have common themes, older cars, cheaper holidays, usually older houses requiring renovations and not an expensive lifestyle. They have chosen less luxuries in their lives but also less work as well!

Anon K
June 5, 2021 11.30pm

Nat S. Annoying to see you compare staying with family as shifting 14k of costs to them. It's simply not an expensive thing to do. It may cost them 100bucks and then cost you 100bucks when they stay.

You spend 15k on your holiday because your a victim of marketing. You clicked in the first $300/day accomodation you saw on the internet. That can last most people a year in any country.

Nat S
June 6, 2021 10.20pm

Dear Anon K

I assume you mean "you're" instead of "your"

Maybe if you spent a bit more time in school your English would be better.

Money Mag should do an article on you about how to live on $300 a year. Joanna Jones must be living such an extravagant life on $18k a year! I'm sure she could get some good tips from you. What's your secret?? In the meantime, all the best living in your country of choice on $300 a year. And I'll enjoy my $15k holidays as it's my time and money so I'll choose how I spend it, regardless of how much you think I spend on accommodation a night. FYI... I'm actually quite adept at finding great deals! Oh, and I'm sure you wish you could afford such luxury.


David San
June 8, 2021 12.31am

Most people have NO CLUE how much they spend. Even less on what they spend it on! Sit down when you pay your bills every month and write it DOWN for a few years. Write down everything. I average $2,500 a month. That's including about $400 a month in fun $. Once my home is payed off (3 more years) that goes down to $1,400. I live in a $400K home. I'm sure hers is less. So that's less heat, electric, maintenance, tax, insurance, exc. I'm not interested in spending $15K for a vacation, never was. But to each their own. If that's what YOU LIKE do it! But understand YOU need to have more $$$ put aside to do it. It's not magic, it's just basic math.

Nat S
June 8, 2021 11.12am

Thanks David. I know exactly how much it costs me to live... I've got many years of my own income and expense data to draw upon. So I know I can afford nice holidays and still spend less than I earn... it's not magic, just basic math!

June 8, 2021 5.41am

Dear Nat S,

Funny that you should comment on someone's improper use of grammar when earlier in comments you used the term 'quesitons'. I'm sure no one pulled you up on it because it's generally poor taste to do so.

People have attempted to answer your questions and it is easy to see how Joanne lives a frugal life. I doubt she is going to break it down week to week expenses.

It says she owns everything outright, grows her own fruit and veg, takes small, cheap trips and does inexpensive things like hiking. Also her expenses were drastically cut when she gave up work and had more time to cook and prepare her own meals.

Nat S
June 8, 2021 11.05am

Dear CR,

a typo is very different to not knowing the difference between your and you're



No Nat No way Nat
June 9, 2021 10.17pm

Nat, you seem so hostile and aggressive to a group of people trying to answer your questions. Why such a superior to and nasty attitude ? And correcting grammar and spelling is really not ok - the idea of good grammar perpetuates xenophobic, racist, and classist ideas about what makes a person intelligent. When correcting a person's grammar you actually highlight your own ignorance around culture, language, education and people's access to it. You just sound so aggressive over finding out how some stranger on the internet paid for her solar panels ? I hope you find peace Nat 🌚

Sam T
June 10, 2021 7.13pm

No Nat No Way Nat, I hope you find peace too, as you also sound a bit hostile and agressive also. I think you're drawing a long bow to make it xenophobic and racist. And nothing wrong with correcting people's grammar (too many people make similar mistakes these days) and it's nothing to do with being classist as you suggest.

Snowflake Alert
June 11, 2021 9.42am

I agree Sam T. I think No Nat No Way Nat needs to take a chill pill, either that or they are Snowflake who is easily offeneded. And I agree with what I think Nat is trying to infer... that the numbers just don't quite add up or as I suspect we're not been given the full story. A fter reading the original story I can see where Nat's confusion(??) lies, as to me it implies her living expenses are $18k, but over and above that she has money to travel and for things like solar. So in the end it's poor journalism or sensationalism to support Frugal FIRE and highlite the $18k, when in fact it is more... how much more we'd never know.

Audrey Duncan
June 6, 2021 7.46am

At the start it stated she paid off her first home within 5yrs, bought her next home with cash. She likely has downsized, bought the 2nd home cheaply & the money she saved she invested. She also said that every year, bar two years, her investments gave 20% profit & she ended up being able to live off profits without dipping into her actual funds. She also has a veggie garden, most likely rarely eats out, only buys what she needs & takes the time to find the best deals on big ticket items. It actually is doable, especially if you dont have a mortgage or outstanding personal loans. This lifestyle isnt for those who constantly eat out or order in or buy ready made processed foods, have to go away on holidays to resorts or overseas, have to upgrade their car, appliances , wardrobe on a very regular basis. Its about simplifying your life & not paying for unnecessary things , but then again, what's necessary in her life isnt what's necessary in another person's life & that's the difference.

Claudia O
June 7, 2021 8.37pm

it is an inspiration to read stories of saving and investing for small revenues. Last weeks I found the story of a another woman - Apurplelife - living similar without a car and trekking a lot.

I have a similar spending rate and quite a big big savings rate and probably I will retire at a similar age as Joanna. Not yet at a 70% savings but on Covid times without car and no eating out I raised the saving rates from 25% to almost 50%.

Thank you, I am going now to read the article from 2018 - I see there is more details how Joanna saved and invested.

Bernie Doehner
June 12, 2021 8.26am

I agree, quite the inspiration. I just turned 49, a lifelong engineer, but it's getting old and I would love to volunteer in various ways and stop working. I would love to translate Joanna's story to the US - anyone?

In the US we don't qualify for a pension until age 67, although I might qualify based on my heart condition after age 50. Is there some place to talk online about retiring early, especially from a US prespective, although I would consider becoming in ex-pat in say Costa Rica

Claudia O
June 12, 2021 7.20pm

Engineer here too, 6 years younger than you, doing volunteering now and want to to do more, so we are from a similar boat. I spend little as Joanna, and get happiness from simple basic lifestyle so I will retire quite soon (no car, cook from scratch, focus on health lifestyle and zero medical issues, living in a small condo etc) and I think the small budget people can retire earlier than others as we are used to properly calculate.

If you didn't speak yet with a financial advisor, it is the moment. I refused to pay it and regret now as I documented properly on books and blogs as MoneyMustache and Apurplelife that retired earlier (in their 30's and 40's) - blogs all from Fire Movement concepts (and many many other stories). As you already maximized all the tax deductible pension plans for last years( I bet you did as most of my work colleagues interested in retire early did it) and to use the USA options of many retirement possibilities tax deducted as 401/403, 2 IRA, roth, mortgage tax deductions etc. - these can give you easily a 50K /year savings, so in 10 years all invested and with compound effect, the retirement money are almost there (plus mortgage closed at your age - or at least I will be mortgage free at your age).

Before 59.5 years old there is possibly to retire from 401k with penalties of 10%. if you want to avoid this 10%, look when you leave your job to immediately roll your 401(k)/403 into traditional IRA. Look at Roth too and of course to have an extra brokerage account with investments (Vuangard and basic ETF in my case) that will cover the first 5 years until you can take from IRA without penalties and have under attention both Traditional IRA to a Roth IRA.

Keith Brown
June 8, 2021 9.16am

As a previous single blue collar earner/saver Compounding interest has served me well for many years , but have made a huge mistake by downsizing missing the housing boom ,never dreamt I would start spending my capital at age 63 , - no sympathy justified ? Ok , yeah no point going out in a guilded coffin BTW I made 30 casket trays a day for just on minimum wage , that's blue collar sweat . My old house was sliding of it's stumps so I have saved not paying house insurance for 20 years the house sat on a triple block ready for an inner city development , 3 years after I sold it jumped $600k above my sold price.

Anon Ymous
June 9, 2021 2.07pm

How does this help people today? She paid off her first house in 5 years - and it was a house in the city near public transport. She must have been making well into 6 figures to do that. Seems like another case of "people with high wages can afford to retire early," which should be obvious to anyone. The average person living on 18k a year would be saving about as much. It would take more than 20 years to get to where this woman started from.

Claudia O
June 9, 2021 8.05pm

There is a link to another article about her story - read both because information is complementary and explains very well how.

She worked until 51 years old, time enough to pay a home for any person. Let's remember she bought it many many years ago (she retired at 51 years old and now she is 63 years old, probably she bought the house 30 years ago when bank interests where 10% or more and any paydown was normal and house market was little). I am not as old as Joanna but for last 20 years the house market raised 3 times in my area. I have 2 homes with mortgages, mine 20 years old with almost 10% interest I paid in 8 years just because I didn't know I can pay faster in first years, and was common for people around me to pay faster and be mortgage free asap.

She didn't have the modern advance of concessional contributions at $25k so I understand her extra efforts to close the mortgage asap, Joanna was able to put 70% of her salary into superannuation after mortgage was closed - and this is possible today - as I spend less than 30% of my revenue (a part in this second mortgage and a part in pension plans and some private Vanguard). More, She makes her own clothes and grows food and preserve it so definitely her expenses are smaller about 2-3k per year than us. Just with these and you see how she reached that saving rate.

More, she used a small secondhand car until was so broken the car didn't move, things like now many people are overspending and changing cars each 5 years and phones twice per year, and this 2020 type of consumerism costs roundly 5-10k /year if not more.

Repeat these for 5-10 years with the discipline of Joanna... I don't have it so I admire her.

Bernie Doehner
June 12, 2021 8.30am

Very good point about consumerism. I actually went backwards, when my 2008 Subaru needed major repairs and got a 2006 Subaru with higher miles. It's been working better than my old car.

My Pixel 3A is from about 2-3 years ago, and I hope to keep it a while. Covid has been great for not driving and preserving my car (I mostly drive on weekend). My biggest problem (in the northestern US) is that I still have to pay a house ransom to purchase. In fact I am looking this weekend.

Is there a forum online to discuss retirement at age 49?

Kurt Goncher
June 12, 2021 2.14pm

Wish I could retire in Australia, where I live in USA, solar would cost me over $20K, health insurance was/is ~$10K plus, the rest of my budget was $1100/ month, and mortgage is ~$1500/ month. So more like $40K no travel, $50K/yr with travel.... Good thing I had a high paying job and saved 50% of my earnings, and paid off two past houses and have ~50K rental income from them. Now to match her story, that would be my parents. If I wanted to live to live in the boonies, my parents house, with fire place to heat, well and septic tank, without health insurance, then yes, I could do ~1200K, untill I get sick or old! Oh yah, my mom's heart surgery was over $300K, she had state pension and insurance, my dad's home care was ~120K/ yr after his stroke, took all their money and home! I think I'll move to Canada, closer than down under.

Rose schepise
June 19, 2021 1.47am

I hear you loud and clear Kurt. The health care system in U.S. a nightmare. Large deductibles and co insurance with many plans. Can lose everything if one needs long term care. Early financial planning is key for those with assets. In my opinion, the US is lacking in comparison to other countries that give their citizens legal control as to how they want to manage their debilitating state of health...i.e. the netherlands

Helen Roberts
December 29, 2021 5.41pm

My son works in the US. On a visit to us in Australia several years ago he got a pain one weekend day and phoned his GP sister about it. She said it sounds like appendicitis go to a hospital. He had his appendix removed as an emergency and was given some medicine to keep taking. All paid for by our universal health care system. His American friends could hardly believe it.