July 23


When is Early Retirement? All You Need to Know

By Harrison O'Reill

July 23, 2023

Early retirement is a dream for many people. It means leaving the workforce earlier than the traditional retirement age of 65 and having more time to enjoy life. But what exactly does early retirement mean? Is it age 50, 55, or 60? The answer depends on various factors, including your financial situation, lifestyle, and goals.

Retiring early requires careful planning and consideration. It’s important to have a solid financial plan in place, including savings, investments, and a budget. You’ll also need to think about health insurance, as Medicare doesn’t kick in until age 65.

And if you plan to retire before then, you’ll need to find alternative coverage. Additionally, you may want to consider part-time work or a passion project to supplement your retirement income and keep yourself busy.

Retirement Planning

Retirement planning is a crucial aspect of financial planning. It involves making decisions about your retirement age, savings, investments, and income. Early retirement is a popular goal for many people, but it requires careful planning and consideration.

Retirement Accounts

Retirement accounts are essential tools for retirement planning. They include 401(k), IRA, and Roth IRA accounts. These accounts offer tax advantages and allow you to save for retirement. It’s essential to understand the contribution limits, withdrawal rules, and tax implications of each account.

Retirement Plan

Having a retirement plan is crucial to achieving your retirement goals. It involves setting a retirement age, determining your retirement income needs, and creating a savings plan. A financial advisor can help you create a retirement plan that meets your unique needs.


Federal employees can participate in the Federal Employees Retirement System (FERS). FERS is a three-tier retirement plan that includes a pension, Social Security, and a Thrift Savings Plan (TSP). Understanding the benefits and rules of FERS is crucial for federal employees planning for retirement.

Financial Independence

Achieving financial independence is a common goal for those planning for early retirement. It involves having enough savings and investments to cover your living expenses without relying on employment income. Achieving financial independence requires a disciplined budget, smart investments, and a long-term perspective.

FIRE Movement

The FIRE (Financial Independence, Retire Early) movement is a popular trend among those seeking early retirement. It involves living frugally, saving aggressively, and investing wisely to achieve financial independence and retire early.

The movement has gained popularity in recent years, but it’s essential to understand the risks and challenges involved.

Retirement planning is a complex process that requires careful consideration and planning. By understanding retirement accounts, creating a retirement plan, and achieving financial independence, you can achieve your retirement goals.

Whether you’re planning for early retirement or a traditional retirement, it’s essential to seek the advice of a financial advisor and stay informed about the latest retirement trends and strategies.

Retirement Lifestyle

A retirement lifestyle is all about enjoying your life after retirement. By carefully planning your retirement date, retirement spending, and hobbies, you can ensure a smooth transition from work to retirement. Whether you choose voluntary retirement or VERA, it is important to consider the financial implications and plan accordingly with the help of a financial advisor.


Retirement Date

The retirement date is a crucial aspect of the retirement lifestyle. It is the date when you stop working and start enjoying your life.

The retirement date can be influenced by various factors, such as your financial situation, retirement goals, and personal preferences. It is important to plan your retirement date carefully to ensure a smooth transition from work to retirement.

Retirement Spending

Retirement spending is another important aspect of the retirement lifestyle. It is the amount of money you will need to maintain your desired lifestyle after retirement.

Your retirement spending will depend on various factors, such as your retirement goals, living expenses, and healthcare costs. It is important to plan your retirement spending carefully to ensure that you have enough money to meet your needs.


Retirement is a great time to pursue your hobbies and interests. Hobbies can help you stay active, engaged, and fulfilled during retirement.

Whether it is gardening, painting, or traveling, having a hobby can make retirement more enjoyable. It is important to budget for your hobbies and make sure that you have enough money to pursue them.

Voluntary Retirement

Voluntary retirement is when you choose to retire before your employer requires you to. Voluntary retirement can be a great way to start enjoying your retirement lifestyle earlier. However, it is important to consider the financial implications of voluntary retirement and to plan accordingly.

Voluntary Early Retirement Authority

Voluntary Early Retirement Authority (VERA) is a program that allows federal employees to retire early. VERA can be a great way to start enjoying your retirement lifestyle earlier. However, it is important to consider the financial implications of VERA and to plan accordingly.

Social Security

Social Security benefits are an essential part of retirement planning. The amount you receive depends on your work history and how much you have contributed to the Social Security system. The Social Security Administration provides an estimate of your benefits based on your earnings history, which can help you plan your retirement budget.

Full Retirement Age

Your full retirement age is the age at which you can receive your full Social Security benefits. It varies depending on the year you were born, but it is typically between 66 and 67. You can start receiving reduced benefits as early as age 62, but if you wait until after your full retirement age, your benefits will increase.

Social Security Administration

The Social Security Administration (SSA) is responsible for administering Social Security benefits. You can apply for benefits online, by phone, or in person at your local SSA office. The SSA also provides information on retirement planning, including how to maximize your benefits and how to coordinate your benefits with other sources of retirement income.

Retirement Benefits

Retirement benefits are an essential part of planning for early retirement. There are several options to consider when it comes to retirement savings, and it is important to understand each one to make informed decisions.

Retirement Savings

Retirement savings are the funds that you accumulate over the years to support your expenses after retirement. It is essential to start saving early to have a comfortable retirement. The amount you save will depend on your lifestyle, goals, and other factors.


401(k) Plan

A 401(k) plan is a retirement savings plan that is sponsored by your employer. You can contribute a portion of your salary to the plan, and your employer may also contribute. The contributions are made on a pre-tax basis, which means you can reduce your taxable income.

Roth IRA

A Roth IRA is another retirement savings plan that you can contribute to on an after-tax basis. The contributions grow tax-free, and you can make tax-free withdrawals after retirement. This plan is ideal for those who expect to be in a higher tax bracket after retirement.


An annuity is a financial product that provides a guaranteed income stream during retirement. It is an excellent option for those who want a predictable income after retirement. An annuity can be purchased from an insurance company.

Minimum Retirement Age

The minimum retirement age is the age at which you can start receiving retirement benefits. It is essential to understand the minimum retirement age for each retirement plan to plan your retirement effectively.


It is important for early retirees to carefully consider their healthcare options and plan accordingly. While there may be challenges in finding affordable healthcare coverage, there are also options available to help ensure well-being during retirement.

Health Insurance

When considering early retirement, healthcare is a crucial aspect to consider. One of the primary concerns is health insurance, as many people rely on employer-sponsored health insurance.

However, early retirees may not have access to such insurance. Therefore, it is important to research individual health insurance options, such as those available through the Affordable Care Act (ACA) marketplace or private insurance companies.


Another healthcare option for early retirees is Medicare. However, eligibility for Medicare starts at age 65, so early retirees will need to find alternative healthcare coverage until then.

It is important to note that Medicare does not cover all healthcare expenses, and there are out-of-pocket costs associated with the program.

Once eligible for Medicare, early retirees can take advantage of its benefits. Medicare covers a range of healthcare services, including hospital stays, doctor visits, and prescription drugs.

However, it is important to understand the different parts of Medicare, such as Part A, B, C, and D, and what each covers. Additionally, there are various Medicare supplement plans available to help cover out-of-pocket costs.


In conclusion, early retirement is a personal decision that requires careful planning and consideration. It is not a one-size-fits-all solution, and it may not be feasible for everyone.

To determine if early retirement is right for you, consider your financial situation, lifestyle goals, and health status. Evaluate your retirement savings, investments, and potential income sources.

Remember that early retirement can come with risks, such as inflation, unexpected expenses, and healthcare costs. It is important to have a solid financial plan in place and to continue to monitor and adjust your plan as needed.

Overall, early retirement can be a rewarding and fulfilling experience if done correctly. With careful planning and preparation, you can achieve your retirement goals and enjoy the lifestyle you desire.

Frequently Asked Questions

Here are some common questions about this topic.

What is considered early retirement?

Early retirement is typically defined as retiring before the age of 65. However, the age at which retirement is considered early can vary depending on the individual’s circumstances, such as their financial situation, career goals, and personal preferences.

Is it possible to retire early?

Yes, it is possible to retire early, but it requires careful planning and preparation. This includes saving enough money to support yourself during retirement, reducing expenses, and considering alternative sources of income, such as passive income streams or part-time work.

What are the benefits of early retirement?

Early retirement can provide several benefits, such as more free time to pursue hobbies and interests, reduced stress from work, and the ability to travel and explore new places. Additionally, retiring early can allow individuals to avoid burnout and enjoy a better quality of life.

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