Want To Retire at 55? See If You Can Answer These Five Questions

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Retiring at 55 might seem too young. You can easily work another decade, and you can’t collect Social Security until 62 at the earliest. Even then, you’re losing money by receiving benefits before your full retirement age (FRA).

Nonetheless, millions of people aim to retire at 55 and don’t care if that means no Social Security or Medicare (which doesn’t kick in until 65). They put greater value on life outside the office, even if it means downsizing.

“A lot of people who retire early worry about passing away early and not having time to sit back and relax in retirement,” says Tyler End, CFP and CEO/co-founder of Retirable. “Others don’t like their current job.”

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Either way, the ones who pull it off tend to have a plan to sustain themselves for what can be decades without a paycheck. They also tend to have saved a lot, have minimal debt and a clear vision for what their post-retirement life will look like, says Sabino Vargas, CFP, senior financial adviser at Vanguard.

If you check off all those boxes, then you’re on your way to retiring at 55. If you're still unsure, see if you can answer these five questions.

1. Will you work part-time or retire completely?

At 55, you're still young enough to work, but will you?

Some people retire completely, using their newfound time to travel, pursue a hobby or kick back and relax. Others consult, work part-time or pursue a new career. Do you know what you plan to do?

Regardless, what you do will have an impact on how much of your savings you’ll draw down and your quality of life in retirement. The more income you bring in, the less you have to rely on your savings and the longer it can grow.

“Working part-time is a great thing, and it's not just the cash,” says End. “It's the time spent engaging with people.”

As you get closer to retirement, see what types of part-time jobs are available that match your interests and skill set to get a sense of your options. If you don't like your choices, consider what classes you can take to learn new skills.

2. What income sources will you use to avoid penalties?

Unless you leave your job in the year you turn 55 or older, you won’t be able to access your 401(k) penalty-free until 59½. In that case, what income sources will you rely on until you reach the penalty-free age, asks Vargas? What about inflation and unexpected expenses? Have you calculated them into your budget?

“Those best positioned to retire early typically have significant savings in taxable accounts,” says Vargas. “They also have alternative income sources to bridge the gap until traditional retirement benefits kick in."

If you haven't figured out how you'll pay for your early retirement, do that before you exit the workforce. The goal is to stop working permanently. The more you plan for it, the better your chances are of accomplishing that.

3. Are your savings fine-tuned for a long retirement?

Since retirement will last longer, your money needs to work harder. That means having your investments allocated in a way that will sustain you for the decades to come.

Most retirees tend to go into preservation mode with their savings, getting more conservative. Early retirees don't have that option.

“You can’t afford to invest too conservatively,” says End. While many retirees go into protection mode with their investments, at 55, you don’t have that luxury. “You need to protect the nest egg and invest for growth that outpaces inflation.”

4. Do you know how you’ll cover health care costs?

Health care isn’t cheap. At 55, you have 10 years until Medicare kicks in, which means you're looking at a decade of self-funding your medical needs.

If you're healthy, you might be able to get away with a basic plan, but if you have any conditions or prefer to see specific doctors or family members, it can become pricey.

“Your health care costs change drastically at different segments from 55 until Medicare,” says End. “If you haven’t spent quite a bit of time with a financial adviser understanding how the cost impacts retirement at different ages, you should.”

For a 55-year-old, the average monthly health care premium in 2026 is $1,313 for an Affordable Care Act (ACA) Marketplace “benchmark” Silver-tier plan, which comes with moderate monthly premiums and moderate out-of-pocket costs.

5. What will you do once you retire?

Whether you plan to work in retirement or pursue a hobby full-time, the key to a happy retirement is having a plan for how you’ll spend your time. Without one, you can easily fall into depression. Everyone needs a purpose, a reason to get up each morning.

“You have to think about what your life will look like if you are in retirement for 50 years,” says End. “Don’t focus on the dollar and cents. What does life look like?” If you have a clear idea of how you’ll spend your free time, great; if you're unsure, think that out before retiring. You might find a phased retirement is a better option for you.

Don’t let your dream escape you

Retiring at 55 is what dreams are made of for many people, but it doesn’t have to be only aspirational.

If you saved enough money, have income to bridge the gap until retirement benefits kick in and have a plan for how you’ll spend your time, then nothing is stopping you.

If you don’t, work a couple more years or overhaul your lifestyle, and you’ll be on your way to retiring early.

Donna Fuscaldo is the retirement writer at Kiplinger.com. A writer and editor focused on retirement savings, planning, travel and lifestyle, Donna brings over two decades of experience working with publications including AARP, The Wall Street Journal, Forbes, Investopedia and HerMoney.