Thinking about retiring early? You’re not alone! At some point, most of us wonder if it’s possible to retire at 55 (or even sooner), without having to cut back on our lifestyles. Early retirement planning starts with a few simple questions: What do you picture yourself doing each day, and what will it take to make that a reality?
What Does “Retiring Early” Really Mean?
Retiring early typically means leaving the workforce before the age of 65, which is when Medicare becomes available and is traditionally when many people stop working. The exact age matters less than whether you’ll have enough money to live the way you want.
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How Much Money Do I Need to Retire Early?
There’s no magic number—it depends on your lifestyle, spending, and how long you expect to live. One approach is to have 25–30 times your annual spending saved before leaving work. For example, if you plan to spend $60,000 a year in retirement, that could mean setting aside $1.5–$1.8 million.
Of course, this rule of thumb isn’t perfect. Healthcare costs, taxes, and travel plans can all change the math. That’s why early retirement planning works best when it’s based on your actual budget and the lifestyle you want—not just a single number.
💡 Tip: Instead of focusing only on a savings total, track your expected yearly expenses. This makes it easier to see if your retirement savings can realistically support the way you want to live.
How Can I Tell If I’m Ready to Retire Early?
You can start by asking three big questions:
- Do I have enough savings or income to cover my daily expenses? Think housing, groceries, travel, and hobbies.
- What about healthcare costs? If you retire before 65, you’ll need to bridge the gap until Medicare.
- Will my savings last 30+ years? Retiring early often means your money needs to stretch further.
Answering these questions is what early retirement planning is all about—seeing if your savings match the life you want.
💡 Tip: Build a “practice budget.” Try living for six months as if you were already retired. You’ll quickly see whether your current lifestyle is sustainable.
📌 Read our blog post – Saving for Retirement at Every Age
Can I Retire Early and Still Travel?
Yes—if travel is part of your budget. The key is building those costs into your retirement plan upfront, so you don’t have to sacrifice later. Some retirees plan for one big trip a year, while others set aside money for smaller getaways or visits to see family.
For many in Connecticut, that might mean planning a winter escape to Florida, the Carolinas, or even the Caribbean. By working those seasonal trips into your budget ahead of time, you won’t have to choose between enjoying the sun and staying on track with your retirement savings.
Keep in mind that travel costs often change over time—airfare and hotels may rise with inflation, and your travel style might shift as you age. Building flexibility into your plan helps make sure you can enjoy these adventures without straining your savings.
💡 Tip: Create a separate “travel fund” in retirement so you can see clearly how much is available for trips each year.
Most of all, your retirement lifestyle should reflect what matters most to you—whether that’s travel, hobbies, or time with family.
What Are the Biggest Risks of Retiring Early?
One of the biggest worries with retiring early is whether your money will last. Here are a few things to keep in mind:
- Healthcare gap: Without employer insurance, private coverage can be costly.
- Longevity: Living longer is great—but it means your money has to last longer too.
- Market downturns: If you’re pulling money from investments during a market dip, it can shrink your nest egg faster.
- Inflation: Prices for food, gas, and housing may keep rising.
Knowing these risks is an important part of early retirement planning and can help you prepare for them ahead of time.
What Can I Do Now to Retire Early?
If you’re exploring how much money you need to retire early or what steps could support your lifestyle, here are some things to consider:
- Adjust your portfolio holdings to reflect your comfort level with risk and retirement goals.
- Keep some money in a liquid account (like an emergency fund) so you don’t have to touch investments in a downturn.
- Think about part-time work or “unretirement.” Even a little income can stretch savings.
- Plan for taxes. Early withdrawals may trigger penalties or higher taxes if not handled carefully.
- Create a withdrawal strategy. Decide what money you’ll tap first—retirement accounts, taxable accounts, or other sources.
What Are the Next Steps for Early Retirement?
Early retirement isn’t only about savings—it’s about making sure you can live the life you want. Talking through healthcare, taxes, lifestyle, and investment choices can make a big difference.
Wondering if early retirement could work for you?
👉 Schedule a complimentary introductory meeting with our team.
Jordan Hickey is a CERTIFIED FINANCIAL PLANNER® professional who helps clients create personalized financial plans. Based in Glastonbury and Wilton, CT, Jordan offers guidance on retirement, insurance, investments, and overall wealth management. Schedule a complimentary introductory meeting with Jordan.
This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete, it is not a statement of all available data necessary for making an investment decision and it does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decision.