How to increase your chances of retiring before 65

The Fundamentals

It’s not impossible to retire early. Consider these tips so you can say goodbye to the working world on your terms.

At one time or another, many of us dream of trading in our careers for days filled with more freedom. If you want those days to get here sooner than the standard retirement age of 65, here are some considerations to help you get there.

For most, it starts with saving substantially

Learning to save and starting to save as early as possible are crucial—but another key to a solid retirement plan is determining how much to save, says Truist client advisory center manager Teo Ayala. He’s a believer in the adage that your income in retirement should be 80% of what it was when you were working. So, if you made $80,000 annually, you may need about $64,000 a year once you’ve stopped working.

But that rule varies depending on what your needs or lifestyle will be in retirement, Ayala says. Take a look at your expenses. Will you own a home outright and spend most of your time there? Or will you be hoping to rent and travel as much as possible? And what about your health insurance costs? If you retire before you’re 65, keep in mind you won’t yet be eligible for Medicare.

Once you’ve decided on an annual dollar figure for retirement, Ayala suggests planning how much you need to save each year by using simple math: If you need $64,000 a year to live on, and you estimate you’ll spend 20 years in retirement (likely longer, if you retire early), that means you need to save $1,280,000.

Armed with the number you’re working toward, consider how many years you have left to save that amount. Let’s say it’s 30 years. Using our fictional scenario above, that means you need to save about $42,666 each year, on average. (Of course, as you advance in your career, your income typically increases, and you may be able to save more in your later earning years than your earlier earning years.)

Still, this seems like a tall order. So how can you reach that number? By investing.

Invest—the right way

It’s important to make sure your money is working hard for you as you save for early retirement. Frank Delia, another financial advisor with Truist, says it’s not a good idea to just put your money in savings accounts or certificates of deposit because interest rates for those are at rock bottom.

“If you have money sitting in a savings account, and inflation’s at 6%, then you’re losing money,” agrees Yanette Sullivan, also a financial advisor at Truist.

So get serious about growing your 401(k) or IRA. Learn to live below your means and prioritize building your nest egg as much as you can, making sure to take advantage of catch-up contributions if you’re at least 50. In 2022, that means you can contribute up to $6,500 more than someone younger than 50, for a total 401(k) contribution of $27,000 annually. And if you have an IRA, that means you can contribute $1,000 more, for a total of $7,000 a year.

If you’re looking to supplement your retirement accounts with a brokerage account, consider using a robo-advisor. Robo-advisors use automated technology to help you meet your goals—both near- and long-term. And robo-advisors like Truist Invest Pro even give you access to human advisors who can talk with you about your goals and how to reach them.

“As we get closer to retirement,” Delia says, “we need to review to make sure our investments are positioned properly in case of a market decline.”

Budget for a more mindful retirement

It also helps if you’re purposeful about how you spend—or plan to spend—your money in retirement. Consider a values-based approach, which simply means figuring out what really matters to you and staying mindful of spending only on those values. This will help you not only envision your retirement lifestyle, but also save more for it.

Picture the things that will bring you real joy in retirement. Take time to write them down, being precise and specific. Don’t just write, “More travel.” How often do you want to travel? How long do you want to be gone? What experiences do you want to have while you’re there?

Consider these factors

Even though proper budgeting, saving, and investing can help you retire comfortably before you’re 65, it’s good to give some thought to these components as well.

  • Social Security. The conventional wisdom is that the longer you wait to start taking monthly Social Security payments, the more your benefit will be each month. Technically, you can begin getting Social Security retirement benefits without penalties at age 62—but you’ll pay a price because you aren’t yet eligible for full benefits. The age at which you’re eligible for full benefits depends on when you were born, but the difference between taking Social Security at 62 as opposed to age 70 can be as much as 30%.
    But unfortunately, there’s no guarantee that Social Security will be an option by the time you retire.
  • Healthcare. As you age, healthcare costs are inevitable. And remember, you can’t get Medicare until you’re 65. “Clients can be at an 80% or 90% probability of success based on our [retirement] plan. But if they’re retiring early, the most important factor that I see that causes clients to go from 90% probability to 20% is healthcare coverage,” says Sullivan. To that point, investing time and resources in improving and maintaining your well-being as you age can potentially save you a lot in healthcare costs down the road.

Ayala, Delia, and Sullivan all agree that the key to retiring early is to have a solid financial plan. Try to be as certain as possible that you’ll be able to meet your goals for the future—and take into account things like long-term care and estate planning. “We’re living longer and longer lives,” Sullivan says, “and that’s one aspect I find that none of us have prepared for.”


Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.

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