How to Retire at 50 (in 7 Easy Steps)

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Early retirement has become a popular financial goal. And well it should be.

Even if you never retire early, just knowing that you can is liberating!

And it may just be the strategy that frees you up to take on even bigger challenges in life.

That can happen when you reach the point where you no longer have to work for a living.

Can You Really Retire at 50?

It’s a big bold claim – retire at 50? Yeah, sure. A lot of people out there dream of early retirement – who wouldn’t love to hang up the office keys and jump off the 9-5 train sooner rather than later?

But while it’s possible to retire at 50 and have plenty of time left in life to have new experiences, it takes careful planning and a will of steel.

You’ll need to carefully manage your budget, invest in efficient high-yielding assets, and review the numbers regularly so you can work towards retiring at a reasonable age without sacrificing your lifestyle along the way.

So if you’ve got ambition and self discipline, maybe you really can retire at 50!

Important Considerations if Retiring at 50 is a Real Goal

If you want to retire at 50, there are some important considerations to take into account.

For starters, you’ll need a good grasp on money. That means understanding the stock market, planning for debt and savings, and investing in yourself through education or entrepreneurial ventures.

Just as important is managing your health – after all, no one wants to retire only to have their retirement cut short! Make sure you’re exercising regularly and eating a balanced diet.

And lastly, it never hurts to start visualizing what you want your life post-retirement to look like. It could be travel, starting up a business from home , or simply spending more quality time with loved ones.

When I was working with retirees, I would often ask them to share what a perfect day would look like for them in retirement. It really helps paint a clear picture of your future expectations for the next chapter in your life.

Before Retirement Tip 💡: Visualize what your “perfect” day looks after you retire.

Whatever it is that lights your fire in the present moment will be a huge influence for not only deciding when you’re ready for retirement but how you plan on approaching that retirement once it’s here.

Looks now look at the 7 steps needed to retire at 50..

7 Steps to Retire at 50

  1. Start Saving EARLY!
  2. Save More than Everyone Else
  3. Invest and Invest Aggressively
  4. Maximize Your Retirement Savings
  5. Set up a Roth Conversion “Ladder”
  6. Live Beneath Your Means
  7. Stay Out of Debt

There are all different ages that people want to retire at, and for most people, it’s probably something like as soon as possible! But let’s focus on how to retire at 50 since it’s a doable goal for a lot of people.

How can you make it happen?

Step 1: Start Saving EARLY!

If you’re 25 right now, then you should start saving to retire at 50 now – as in immediately. The best way to prove the point is with a couple of examples.

If you decide to put off saving to retire at 50 for another five years – when you are 30 – and you begin saving $10,000 per year, invested at an average annual rate of return of 7%, then by the time you’re 50 you will have $425,341.

But if instead, you decide to start saving right now – again, $10,000 per year, invested at an average annual rate of 7% – then by the time you are 50, you will have $656,227 saved.

That’s a difference of more than $230,000, just for beginning to save and invest five years sooner.

Step 2: Save More than Everyone Else

It’s a common belief that you can retire just by saving 10% or 15% of your annual income. And that may be true, if you plan to retire at 55 or even 60, and have 35 or 40 years to save and invest money.

But if you’re serious about retiring at 50, you’re going to have to save more than anyone else. That might mean saving 20% of your income, or maybe 25% or even 30%. Heck, if you’re much older than 25 or 30, you’ll have to save between 40% and 50% of your income if you hope to retire at 50.

What you can do is start out saving 20%.

But each time you get a pay raise or promotion with an even bigger pay raise, instead of spending the extra money, commit it to savings. After a few years of steady pay increases, you should be able to increase your savings rate to 30% or even more.

Saving such a large percentage of your income accomplishes two very important goals:

  1. It obviously enables you to reach your savings goals faster
  2. But just as important, it conditions you to living on less money than you earn

That second point will be really important when you actually do retire. The less money that you need to live on, the sooner and more effectively you’ll be able to retire.

Step 3: Invest and Invest Aggressively

I probably don’t have to tell you that you’re not going to be able to retire at 50 by investing in interest-bearing assets, like certificates of deposit. Interest rates of 1% per year or less just won’t cut it.

You’ll have to invest in stocks, and that’s where the great majority of your money will need to be invested at all times. The stock market has returned an average of between 9% and 11% over the past 90 years and that’s the kind of growth that you’ll need to tap into if you want to retire at 50.