Early Retirement

Early retirement — leaving full-time work before the traditional retirement age of 62–65 — is increasingly achievable for high earners who plan well, and increasingly analyzed with the rigor it deserves. The appeal is obvious; the math requires care. A longer retirement horizon, pre-Social Security income gap, higher healthcare costs, and sequence-of-return risk in the early retirement years each require specific planning that traditional retirement advice doesn’t fully address.

The portfolio size required for early retirement is larger than the 25x spending multiple of the 4% rule suggests — because the rule was designed for 30-year retirements and most early retirees face 40–50+ year retirements. Research suggests that 3–3.5% withdrawal rates provide high historical sustainability over 40-50 year periods, which translates to a 28–33x spending multiple. A household spending $250,000 annually (in today’s dollars) needs $7–8.3 million in invested assets to sustain a 3–3.5% withdrawal rate indefinitely. Healthcare costs before Medicare eligibility at 65 are particularly significant: a private market health insurance plan for a couple in their 50s runs $15,000–$30,000 annually without employer subsidy.

Social Security strategy matters significantly for early retirees who have accumulated a work history. Claiming Social Security at 62 (the earliest possible) permanently reduces benefits by up to 30% compared to waiting until full retirement age (67 for those born after 1960). Waiting until 70 generates 24% more than full retirement age. For a couple with significant accumulated benefits, the optimization of Social Security claiming can be worth $100,000–$300,000 in lifetime income — a decision best modeled specifically for your earnings history and retirement income structure.

The FIRE strategy framework — including the account structures and withdrawal sequencing that make early retirement tax-efficient — is covered in FIRE strategy. For the income picture during the accumulation years, see six-figure life. The Life & Money pillar covers early retirement as part of the complete financial picture of major life events and transitions.