8 Key Signs You’re Ready To Retire Early (Even If Your Financial Advisor Disagrees)
Written by
Jordan Rosenfeld
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Molly Sullivan
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For many Americans, the dream of early retirement can feel out of reach, especially when financial advisors warn that it’s too risky or unrealistic. But for those willing to live smaller, trim expenses and think creatively about income and healthcare, “early” might be closer than it seems.
Experts say the key isn’t having millions in savings but preparing emotionally as well as financially for the decades ahead.
Here are eight key signs you’re ready to retire early even if your financial advisor isn’t so sure.
1. You Know Your ‘Enough’ Number — And It’s Realistic for You
Early retirement isn’t about accumulating more; it’s about knowing what’s enough and living intentionally. Financial planners say the people who retire early successfully have trimmed their spending, practiced living lean and tested their budgets in advance.
“Most people think early retirement is about having more. More savings, more growth, more waiting. In reality, it’s about knowing what’s enough and being willing to live differently to get there,” said Lynn Toomey, founder of Her Retirement.
So long as you’re comfortable living on less, an early retirement may be in reach. For example, “If you trim spending 15% to 25% for the first five to seven years, you can sometimes retire with less than the classic 25x number,” said Marcel Miu, a CFA and founder of Simplify Wealth Planning.
2. You’ve Diversified Your Income Beyond One Big Account
The people most ready for early retirement aren’t just sitting on a single nest egg. They’ve built two or three smaller income streams that adjust with the market and help them manage taxes.
For example, Miu pointed out, “A small consulting gig that brings in $15,000, a rental that pays for itself and a regular brokerage account you can draw from beats having another $100,000 locked in a 401(k) you don’t want to touch.”
Toomey added that diversified income streams “like part-time consulting, rentals or small business income” can make the difference between a stressful retirement and a flexible one.
3. You’ve Tackled Debt and Built a Cushion
Debt is one of the biggest barriers to early retirement. You don’t have to be mortgage-free, but any loan that forces you to sell investments in a down market can jeopardize your plan.
“Ideally, no consumer debt and no car loans,” Miu said. “One low-rate mortgage is fine if it fits inside the reduced budget and you have assets to wipe it out.”
4. You Have a Healthcare Plan Before Medicare
Healthcare costs can derail even the best retirement plans, especially for those retiring before 65. Miu and Toomey emphasized researching coverage early and budgeting realistically.
“ACA plans are not cheap, especially for people in their early 60s,” Miu said. “Average premiums are in the hundreds per month and can climb fast with income.”
With marketplace plans running between $7,000 and $12,000 per person per year (and that’s if ACA subsidies are preserved), are a huge chunk of a retiree’s budget. “Our family plan is set to increase by $500 a month in January,” Toomey pointed out.
5. You’re Mentally and Emotionally Ready
Financial stability is only half the equation. Retirees who are most likely to thrive in an early retirement have more than just material thoughts in mind. The biggest mistake Toomey sees is people “planning for the money and forgetting the meaning.” She stressed that structure, purpose and connection matter as much as savings.
“The people who do well have three things in common,” Miu said. “Their spouse is on board with trimming costs, they know what they will do with their time and they don’t freak out when the market has a bad month.”
6. You’ve Stress-Tested Your Retirement Budget
You’re ready to retire early if you’ve run a “trial retirement” before you stop working, which will show you “whether your plan feels realistic or restrictive,” Toomey said, and how well you actually live on less.
“Live on the retirement budget for six to 12 months while you still have your paycheck,” Miu advised. “If you can’t do it now, you won’t do it later.”
7. You’ve Planned for Inflation, Longevity and Market Risk
Retiring early means your portfolio needs to last longer, as much as 35 to 40 years, Miu noted. That’s a long time for inflation and market swings to erode buying power, so planning flexibility into your spending is key.
“Spending less in the opening years is how you lower the sequence-of-returns risk,” Miu said.“Some retirees buy late-life income that turns on at 80 or 85 so they only need to manage the fragile first 15 years,” he added.
8. You’ve Considered Creative Tools Like a Reverse Mortgage
For some retirees, tapping home equity responsibly can add valuable flexibility or extend the life of savings.
“A reverse mortgage should not be considered the realm of the insecure but a legitimate retirement tool,” said Todd Christensen, an accredited financial counselor, home equity conversion mortgage (HECM) counselor and founder of The HECM Coach.
“Instead of striving to enrich the next generation, use the hundreds of thousands of dollars of home equity to extend your own financial independence in retirement,” he said.
Retiring early isn’t about being wealthy but being strategic. If you’ve managed debt, secured income streams, planned for healthcare and learned to live within your means, you may already be closer to ready than your advisor thinks.
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