Editor’s note: “Becoming a Digital Nomad” is part 11 of an ongoing series on how to retire early and the FIRE (Financial Independence, Retire Early) movement. Part one is How to Retire Early in Six Steps. To see all early retirement articles, jump to the end.
For 99% of human history, humans were nomads. Now, what’s old is new again as more people embrace a modern version of this lifestyle — replacing spears with laptops.
These digital nomads leverage technology to work remotely while living location-independent lives, moving between destinations domestically or abroad. For early retirees, it’s a way to blend remote work or passive income with the flexibility to explore the world, enjoying the perks of early retirement without fully stepping away from work.
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Digital nomads as part of the FIRE movement
The nomadic lifestyle aligns with the F.I.R.E. (Financial Independence, Retire Early) movement. Many nomads choose low-cost countries as their base, reducing expenses and investing their savings for long-term financial growth.
According to MBO Partners, 18.1 million Americans — about 11% of the U.S. workforce — identify as digital nomads. As Carl Sagan put it: “We began as wanderers, and we are wanderers still.”
Take Michael Wardian, a professional ultramarathon runner who ran 2,197 miles of the Appalachian Trail in just 50 days to celebrate his 50th birthday. The twist? He worked remotely the entire time, overseeing humanitarian food aid cargo as an international shipping broker. “Working remotely while running solidified my belief that if you’re dedicated and not afraid to ask for help, anything is possible… you can still do your job and chase your dreams simultaneously,” he says.
If retiring early and becoming a digital nomad sounds appealing, careful planning is key. Here’s how to keep both your finances and your wanderlust on track.
Financial Planning for Digital Nomads
Michelle Schroeder-Gardner, founder of Making Sense of Cents, embraced a nomadic lifestyle after turning her personal finance blog into a full-time business. “Becoming a digital nomad allowed me to combine my love for travel with a career I could take anywhere,” she says. She now travels full-time on a sailboat with her family.
Schroeder-Gardner emphasizes the importance of diversified, location-independent income streams, like earnings from her blog and dividend-paying stocks.
CFP Board Ambassador Elaine King Fuentes agrees: “Have multiple income streams — a mix of service, like consulting and product-based businesses.”
Both stress the need for emergency funds to cover unexpected expenses like medical emergencies or last-minute flights. Fuentes, who has lived and worked in multiple countries, adds, “Start with an emergency fund of at least one month’s expenses, and create a dedicated travel fund to support this lifestyle.”
Managing retirement savings abroad presents additional challenges. U.S. citizens must pay federal taxes on worldwide income and may face account restrictions from U.S.-based brokerages. Fuentes suggests maintaining a U.S. address or using global banks like Charles Schwab or E-trade Morgan Stanley that offer fee-free international ATM withdrawals.
For day-to-day money management, Schroeder-Gardner advises using travel-friendly credit cards with no foreign transaction fees. Fuentes also suggests multi-currency accounts to mitigate currency risks.
Navigating taxes and legal considerations
No matter where you go, the IRS follows. Fuentes encourages people to research tax rules in their home country and planned destinations, as “tax treaties can impact the duration of your stay.”
U.S. citizens living abroad are taxed on worldwide income, but credits like the Foreign Earned Income Exclusion (up to $126,500 in 2024 and $130,000 in 2025) and the Foreign Tax Credit can help offset double taxation. Tax treaties between countries may further simplify filing requirements.
Domestically, state taxes depend on primary residency. States like Texas and Florida have no state income tax, while others, like California, aggressively pursue tax liabilities even for those living out of state. Other states do not tax retirement income. Establishing clear domicile records is crucial for defending your obligations.
Beyond taxes, research visa requirements for each destination. Some countries offer retirement-specific visas with income or asset requirements, while others allow longer stays with tourist visas.
“Keeping important documents in cloud storage is a must,” says Schroeder-Gardner. Digitize essentials like passports, visas and tax returns to stay prepared on the move.
(Image credit: Michael Wardian)
Healthcare and insurance while traveling
Early retirees under 65 won’t have access to Medicare, so you’ll need alternative health coverage. If not covered by remote work, the Affordable Care Act marketplace is one option.
Many countries offer affordable, high-quality care, and some allow foreigners to join their public systems. Fuentes recommends exploring international health plans from providers like Cigna Global or IMG, which cover routine care, emergencies and medical evacuations.
Travel medical insurance is also critical. Schroeder-Gardner notes, “Travel insurance has become a must for us.” Look for policies that include medical emergencies, trip cancellations and personal liability. And if you plan to bring medications with you on international travel, don’t risk having them confiscated at the border.
For those planning to travel abroad, consider focusing your trip on the safest countries to visit.
Remote work: staying connected and productive
Reliable internet is the foundation of remote work. Schroeder-Gardner ensures connectivity by researching options in advance and carrying backup solutions like multiple mobile hotspots.
Similarly, Wardian relied on portable technology during his Appalachian Trail journey. “T-Mobile coverage for my phones and my Surface laptop worked surprisingly well, even in remote sections,” he says.
Coworking spaces can also provide stable internet and a professional environment. To protect sensitive data, consider a VPN when working on public Wi-Fi.
Adjusting to the digital nomad lifestyle
Becoming a digital nomad requires more than packing a laptop — it’s a lifestyle adjustment. Schroeder-Gardner advises starting with short trips to test the waters. “This helps you gauge the impact on your financial and social life,” she says.
Maintaining social connections is just as important as staying online. “Being a digital nomad can sometimes feel isolating, so finding online groups or meeting other travelers can make the experience more fulfilling,” she adds.
Adjusting to constant change takes time. Wardian found success by creating a system with his team before hitting the trail. “I made myself available as much as possible for work tasks while staying flexible with my running schedule,” he says.
For Schroeder-Gardner, “I plan my work schedule around travel activities, dedicating specific blocks of time to focus. … But for the most part, I try to save the best weather days for traveling and experiencing a new destination.”
Ultimately, flexibility may be the greatest need and perk of this lifestyle. You never know when the mountains, beaches or new cities will call and you must go.
After all, that’s what we’ve been doing for most of our history.
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