Early Retirement: What It Actually Takes to Retire Before 60
Early retirement is achievable — but it requires a fundamentally different approach to savings and spending than conventional financial planning assumes. Here's what the math actually looks like.
The Core Equation: Savings Rate
The single most important variable for early retirement isn't income — it's your savings rate. How much of your take-home pay you save each month determines how fast you reach financial independence.
| Savings Rate | Years to Retirement |
|---|---|
| 10% | ~40+ years |
| 25% | ~32 years |
| 50% | ~17 years |
| 65% | ~11 years |
| 75% | ~7 years |
Assumes 5% real investment returns and 4% withdrawal rate.
The FIRE Number
Your target is 25× your annual expenses. To retire at 45, you need your portfolio to be 25 times what you spend per year. Lower spending has a double effect: you save faster AND need less to retire.
Cutting annual spending from $60,000 to $40,000 saves $20,000/year AND reduces your FIRE number by $500,000.
Early Retirement Risks to Plan For
- Sequence of returns risk — a market crash early in retirement is devastating
- Healthcare costs — before Medicare at 65, you're on your own
- Inflation — 30–50 years of inflation erodes purchasing power
- Lifestyle creep — "one more year" syndrome
Calculate Your FIRE Number
Use our retirement calculator to map out your path to early retirement.
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