If you’ve managed to save $1.3 million by the time you’re 57 years old, it’s probably a testament to your disciplined approach to living within your means and wisely investing any leftover funds.
For reference, as of 2022, the average 57-year-old had roughly half of that amount – approximately $538,000 saved in retirement accounts, according to the Federal Reserve.
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There are some potential financial implications to consider when planning for an early retirement.
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You’re looking at retiring five years before Social Security benefits start at 62 and 10 years before you become eligible for maximum benefits at 67, resulting in reduced monthly Social Security payments that will cost you 30% less for life. Additionally, you won’t have Medicare coverage until age 65, so you’ll need to plan for health insurance costs for the preceding eight years, unless you enroll in your partner’s plan.
before you turn 59.
advise against it.
If you’re hypothetically retiring in good health at the age of 57 and have a family background that supports longevity, it’s possible your life expectancy could exceed three decades.
At 49 years old and without any savings for retirement, don’t feel anxious. Here are some steps you can take:
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Making the transition to retirement can be done thoughtfully and gradually, if you develop a well thought-out strategy.
Cover your entire scope; leave no area unchecked
You might want to consider offsetting healthcare expense costs by paying off your home, downsizing, or moving to a more affordable neighborhood. It’s a good idea to put enough money aside to cover at least two years of living expenses in case the stock market experiences a downturn and impacts your investment portfolio, which can also help cover unexpected medical bills and car and home repairs.
until you’re 65.
You might find it helpful to consult with a financial advisor to assess your retirement objectives and map out a strategy to boost your savings while minimizing the potential for financial loss.
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This information is presented for purposes of education and background only, and is neither intended to be a recommendation nor a guarantee of any kind. It is provided without any implied or stated assurances.
