I want to retire early. Where should I invest?

Planning young: a retirement roadmap
Planning young: a retirement roadmap

I want to retire at age 55. I contribute to several retirement savings plans but worry I'll be penalized for withdrawing my savings early. I want to invest additional money somewhere else. Where should I invest? --Dave

Many of us dream of retiring long before our 65th birthday and having more time to enjoy life without the hindrance of a regular 9-5. But for some people, it can seem like an impossible goal.

Saving enough to retire early is hard enough, but many retirement accounts will punish you for withdrawing your savings too soon.

Here are three steps to becoming financially independent so that you can quit the rat race long before the Social Security checks start to arrive.

Step 1: Crunch the numbers

The first step is to make sure you'll actually have enough money to retire early.

"Many people greatly underestimate how much money they will need to last for a 35-45 year retirement," says Jon Ulin, a certified financial planner at Ulin & Co. Wealth Management.

Related: How to become financially independent in 5 years

If you're following the standard retirement route, you should aim to save six times your annual income by age 50 and ten times your income by age 60. When you retire at age 65, you should have about 13-15 times your income stashed away, says Ulin.

In other words, someone earning $100,000 a year would need to save between $1.3 and $1.5 million by age 65.

But in order to retire by age 55, you may need to save 33 times your annual salary. That means someone earning $100,000 would need to save around $3.3 million, says Ulin.

Not sure if you're on track? Try using a retirement savings calculator or work with a financial adviser to map out a plan.

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Step 2: Choose a flexible retirement plan

If you withdraw money from some retirement accounts before age 59 1/2, you could be charged a 10% penalty.

But there are ways to avoid taking such a hit.

If you plan to use the money before reaching retirement age, your best option is to start with a Roth IRA.

A Roth lets you withdraw your contributions at any time, penalty-free. But there's still a fee to withdraw money that you've earned on your investment before age 59 1/2.

While that sounds like a pretty good deal, keep in mind that only people earning less than $118,000 per year are eligible for a Roth.

Another option is to use a traditional IRA or 401(k). While these accounts do charge an early withdrawal fee, there are still some ways to avoid the penalties.

For example, the IRS will waive the fee if you take money out of your 401(k) at age 55 or the year after.

This IRS exception, sometimes called the "Rule of 55," doesn't work on IRA accounts.

Related: 5 simple steps to retiring rich

If you plan to retire earlier than 55, consider using the 72t rule.

This rule, also known as Substantially Equal Periodic Payments, or SEPP, allows you to withdraw early from an IRA, 401(k), 403(b) or other type of qualified retirement plan without any penalty.

But there's a catch. You have to withdraw the same amount for at least five years or until you turn 59 1/2, whichever comes first, explains Lawrence Heller, a CFP at Larry Heller & Associates.

You could be penalized if you deviate from SEPP, so consider speaking with a financial professional before deciding if it's the right strategy for you.

And of course, you'll still need to pay regular income taxes on the money you withdraw.

Related: Your biggest financial fears -- and how to avoid them

Step 3: Invest your extra savings

To increase your chances of retiring early, consider supplementing your retirement savings account with a brokerage account, says Dana Anspach, a CFP and CEO at Sensible Money.

These after-tax accounts allow you to buy and sell stocks, bonds, currencies and more. Unlike many retirement accounts, they also allow you to invest as much money as you want and withdraw money at any time.

Related: Help! My student debt is delaying my retirement

Another place to stash extra money is a health savings account, says Christopher Balcerowiak, a CFP at Ameriprise Financial Services.

While that money can only be used for qualified health care expenses in order to avoid penalty, we all have more substantial health care costs as we age. And those costs can really start to add up in your golden years.

A couple retiring this year will need an estimated $275,000 to cover health care costs in retirement, according to Fidelity.

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