Retirement Planning

Retire Early? What You Need to Do Today

According to Gallup, the average retirement age in America is 66. For most, it takes decades of planning and saving money across multiple accounts to feel confident and financially comfortable to take the first step into one’s golden years. But what about those individuals and couples who want to retire early? For those who want to “fast-track” their retirement and take the plunge in their 50s, there are critical planning steps to consider early in your career.

Of course, retirement before the average age of 66 will look different for everyone, and will be impacted by a myriad of factors such as your current financial position, financial standing when you started saving, lifestyle expectations, where you live now vs. where you want to potentially move to, healthcare plans, etc. The bottom line is that it will take a lot of planning and discipline to make early retirement a reality. In order to achieve this, you will need a thorough financial plan in place that you can follow. Here are some general tips:

Start saving as early as possible and as much as possible. Typically, we recommend individuals try to save at least 10-15 percent of their paycheck if they are aiming to retire at a “traditional” age range of 65+. For those trying to retire 10-15 years earlier, that saving range will need to be more like 20-40+ percent of your paycheck, depending on when you started saving. If possible, have your contributions on an automatic increase each year (even if it’s just 1 percent each year), and always make an increase in your contribution when your salary increases.

Max out contributions on retirement accounts like 401(k)s and IRAs. These accounts allow your money to grow tax-deferred and further help compound growth over time. To that end, consider contributing a portion of your savings to a Roth 401(k)/Roth IRA, if possible. Roth IRA’s allow you to withdrawal the contributions you made at any time without penalty. You will need to plan for this kind of flexibility when you are retiring prior to age 59.5, which the IRS has deemed the minimum age to withdraw from a traditional IRA penalty-free. However, it must be noted that any investment gains will be subject to a penalty if withdrawn prior to age 59.5. If these retirement accounts will be your main source of income after retirement at age 50, you will need to take these withdrawal rules into account.

Avoid debt and live within your means. In order to retire early, you will need to cut expenses wherever you can, avoid a large mortgage and credit card debt. You will likely need to live on a tight budget leading up to your retirement goal. Typically, outstanding debt at one’s desired retirement age is a big reason why people continue to work.

Plan for medical expenses. Do not underestimate this bill. Retiring at 50 means you have 15 years until Medicare kicks in, meaning you will need to pay for health care costs out of pocket. This is where a written financial plan can help keep you on track. It’s especially important, given the circumstances, that you work closely with a financial professional who can keep an eye on the estimated cost of healthcare, and how those costs might change year-over-year leading up to your 60s, 70s and beyond.

Retirement in your 50s could be an attainable goal, but it requires extensive planning and budgeting. Do you need a plan for your retirement? The advisors at Girard can help contact us to have a conversation.


These articles and reports are for general information purposes only and are not intended to provide legal, tax, accounting or financial advice. The information in these articles or reports, and any opinions expressed therein, do not constitute a recommendation or an offer to buy or sell any security or financial instrument. Viewers should consult with their financial and/or legal professionals before making any financial decisions.

Girard is a marketing name used by Univest Financial Corporation to provide (1) investment and wealth management, fiduciary services and trust services through its subsidiary Univest Bank and Trust Co., (2) specific fiduciary and investment advisory services through Girard Advisory Services, LLC (3) securities products, insurance products and brokerage services through Girard Investment Services, LLC,  a registered broker-dealer and member of FINRA and SIPC, and a licensed insurance agency, and (4) investment management and related products and services for Pennsylvania municipal entities through Girard Pension Services, LLC. Investment products and services are not FDIC insured, not a bank deposit, not bank guaranteed, not insured by any federal government agency and are subject to risks, including possible loss of any principal amount invested.