At age 62, I was in a high stress job and felt that my health was suffering because of it. I sat down with the wife and we agreed that our finances were more than enough to live on, especially since we had paid off our condo. So we both pulled the plug. It meant waiting on social security, but it wasn’t an issue. The key was having money in the bank and some other sources of income, such as my military retirement (which also came with healthcare).
I did not retire early. So no input directly to the OP.
But as to this:
I had a darn nice job I really liked. I retired just over 3 years ago and the improvement in my life is dramatic.
Retirement is by far the best job I’ve ever had.
For anyone: if your finances can handle it, do it. All else is folly.
True dat!
That’s what I used when I retired at 48. IRS rule 72t.
https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-substantially-equal-periodic-payments
https://www.dinkytown.net/java/72t-calculator.html
(See my story #13 above.)
My late wife passed away when she was in her 40s. I started seeing a woman I had dated many years ago who was widowed about the same time. In other words, we both had spouses pass away in the “prime of life,” when many of us are planning retirement and maybe having that getaway house in the woods or at the beach. We had, like many, also been thinking about how much we would travel and just enjoy ourselves.
So, at age 60 we both decided that we wanted to spend our time together, even if it meant less travel, no second home, and a bit of frugality. We made it happen. Retirement, especially being with my wife, is the best choice I ever made. Highly recommended.
(We DID, in fact, get to do a bunch of traveling, but it was very much on the down-low. No big fancy cruises or luxury getaways.)
I’ll be honest, this thread kind of makes me feel despair. I’m glad other people found a way to navigate retiring before age 65, but it sounds like most of you had a pension from work, health care from work, health care from a spouse, or a spouses income.
retiring as a single person in your 50s with a lot of money tied up in pre-tax 401ks, while also trying to adjust your MAGI to stay below 400% of FPL so you qualify for ACA subsidies seems hard. Well, maybe not hard. More complex and very restrictive.
It seems like for someone in that situation their choices are basically move to a blue state with enhanced ACA subsidies and do a roth conversion ladder to convert pre-tax 401k assets into after tax IRA assets. That or move overseas for health care. Or enter a sham marriage to get a spouses health insurance (gay for pay for the win).
Of course if someone has enough liquid assets in brokerage accounts, bank accounts, etc to pay for living expenses for 5 years, they can live off of that while they do the roth conversion ladder, but they keep their taxable income from roth conversions low enough to qualify for ACA subsidies.
This assumes you want to stay in the US that is. If you move overseas health care is much more simple.
I suspect this is deliberate. The expected retirement age is 65+. If you are trying to retire in your 50s, it is assumed that you are financially well off enough to do so without dipping into pre-tax IRAs?
Most likely. And it was even harder before the ACA. They want to keep people economically productive until they are too disabled to contribute to the economy. Only then are they allowed to retire.
Isn’t this a valid societal goal?
Not when it is involuntary. Every developed nation other than the US has unchained health insurance from employment. If someone retires at age 40 or 56 in any other developed nation, they still have health insurance. Its only in the US (as far as developed nations go) that you lose your health insurance when you lose your job.
Its like not being willing to feed a horse unless it continues to pull a plow, and only letting it retire when its joints are so destroyed its not economically productive anymore. Considering that most of the economic gains go to the top, the farm owners benefit from this system, not the horses.
Also people retiring early can have economic benefits. It opens up career paths for younger people to move up the corporate ladder. Retired people can provide childcare for grandchildren.
Fwiw, I’ve unretired. Not for financial reasons, but it turns out i do better with the structure of a job. Also, a fully remote part time job fell into my lap.
That’s similar to my wife. She used to be a teacher. Around the time of COVID she developed health problems so she took a year leave of absence, then quit entirely. After a few years she decided she was bored so went back to work as a teacher’s assistant. Much lower pay than before but, as I said, she gets health insurance. Also she gets to be with kids, which she loved, while not having to deal with the parents and the bureaucracy, which she hated.
It is- but important parts of that quote are " a lot of money tied up in pre-tax 401ks" and “adjust your MAGI to stay below 400% of FPL”. I have an acquaintance who claims to be retired, but he’s really not - he’s collecting SS and also working as much as he can without affecting the SS benefits. 400% of FPL is $63840 - he didn’t earn that much working full-time. He’s going to be eligible for ACA subsidies or maybe even Medicaid no matter what he does. He doesn’t need to adjust anything. ( and actually, he wouldn’t need to still work if he didn’t spend over $1000 a month on lottery tickets)
On the other hand , it would be almost impossible for me to keep my income low enough to get the subsidy - my pension alone gets us pretty close. I actually probably could have retired early even if I didn’t have health insurance from my job - but there would have been no point. By the time I paid for unsubsidized insurance , I wouldn’t have been able to have the retirement I wanted.
The people I’ve known who retired early had some combination of the following:
- Most were in public service and worked a 30-40 year career straight out of high school or college, so that when their pension was full, they were like 58 or something.
- Most had a spouse who continued working.
- If they didn’t work in public service, they didn’t have children.
- They had some sort of inheritance involved- grandparents or parents or spouses with the same.
- They were notorious cheapskates who were beyond frugal and were ok without the extra income.
I can’t think of anyone working a normal job, with kids, who didn’t have an inheritance who pulled off retiring early.
Mrs. Cretin and I retired in 2005 at ages 59 and 55 respectively. Both of us had been well over 30 years in our professional careers and were burning out. Owned our house outright, childfree by choice, always lived within our means. We were never frugal or cheap, but extravagance simply never appealed to us so a mortgage was always our only significant debt. Mrs. C’s pension includes terrific Health Coverage which we still enjoy although it’s been secondary to Medicare for 15 years now. No regrets.
I was planning on retiring around 67 or so (having to do with getting a sabbatical when I was 65 and then coming back for a year as required). But then in July 1999 McGill announced that as of Jan. 1, 2000 they were going to adopt a new actuarial table that took into account increasing life expectancy, but also that professors tended to live longer than the general population. They also had a program to encourage early retirement. So I retired on Dec. 31, 1999, three weeks before I turned 63. The settlement included: the old actuarial table with the pension adjusted so that they pretended I was actually 65. (Perhaps @puzzlegal can tell how crazy it was that I get a bit over 83K a year on a retirement account of 960K) Also I got 3/4 of my “missing” 25 months salary. I got to keep my complementary health insurance, whose main purpose is to provide health insurance when you travel outside Canada, and dental insurance. And, best of all, I was able to keep and even renew my research grants and continue my research.
My wife was a free-lance translator and she kept that up for maybe five more years, gradually reducing it. We had retirement accounts (similar to IRAs) but have not used them at all, since my pension, along with government pensions have covered all expenses so far. I guess we may need them if we need real eldercare.
Married (46 years), 2 kids launched and self-sufficient, both of us retired a little early. 62 for me, 63 for her.
Since I’m a bit older, I retired before her and went on her health insurance. Then when she retired we both “COBRA-ed” until eligible for Medicare.
If it matters, I got a small pension from Mega-corp, but the phase out happened during my tenure there, reducing my benefits to a fraction of the old-timers.
We do have the “three legged stool” that retirement planners talk about, but the legs are definitely unequal. Our savings/investments are by far the largest source, followed by SS, then by the pension mentioned above.
We’re the only couple I know who did this* with none of the above. No public service or military, fractured careers (between us we had 34 different jobs across 46 years), two kids - put both through college and “trade” schools, no inheritance and no parental help. We were good planners/investors, but my posts here about our RVs, boats, airplanes, etc. negate any claims of exceptional frugality.
*If retirement at 62 can be considered “early”.
I got laid off at about age 59.5. Some of my fellow “expendables” (who are about the same age) did retire, but it was not intention to do so. After more than a year of looking for a job I basically gave up and now I call myself “98% retired”. I’m not really looking for a job, but for some reason have not committed 100% in my mind.
Health care: I got laid off in November (of 2024), by delaying paperwork I got my generous severance package (34.5 weeks of pay for being there 17+ years) in 2025 – I chose COBRA as my income in 2025 way too high for an ACA subsidy.
Now that I am off COBRA my ACA plan isn’t too bad, as I am only taking a small amount out of my IRA – this was what worried me the most.
I’m lucky as I had a high paying job in a relatively low cost of living area. I’m also fairly frugal so can live off savings (plus small IRA withdrawl). Not sure when I will take social security, but after I qualify for Medicare.
Brian
ETA – most of my fellow “expendables” had a working spouse so could use that for insurance. I’m single.
Before the layoff they offered early retirement, I was 6 months too young to take it, of my fellow expendables was 17 DAYS too young. One was old enough but didn’t take early retirement. Lucky for him he was allowed to take it after the deadline (4 weeks of pay/year instead of 2)
I learned at 35 that I was psychologically incapable of two things: (1) continuing to serve in the Navy and (2) being retired. So here I am, drawing retired pay and working a second career.
I feel your despair. I plan to retire in a few years when I’ll be in my early 50’s. To be able do so, I have built up a large brokerage account. You likely know that when you sell assets in such an account, you will only pay taxes on earnings, and for assets held longer than a year, at favorable long term capital gains rates. By strategically selling specific assets, I’ll be able to control my MAGI, which in turn will allow me to take advantage of ACA subsidies, resulting in savings of many thousands in health care costs. It’s a complicated analysis. Roth assets can also help to boost actual income without affecting MAGI.
My opinion is that for most people, without special situations, will absolutely need after tax money in savings or a brokerage account if they want to retire before 59.5, especially if they need ACA insurance coverage. If you don’t have that, you will be hard pressed to retire before after tax retirement accounts are accessible.