Retiring Early

The average retirement age is 62, but there is growing interest in retiring early.

Written by Lindsey Danis / July 21, 2022

Quick Bites

  • Retiring early has many perks, including more time for your favorite activities, but there are important questions to consider first.
  • Those who save enough to retire early tend to have strong motivations and frugal tendencies.
  • You’ll need a plan for health insurance and housing in early retirement.

Court Brown and her wife, Nicole Brown, retired at ages 36 and 31, respectively. They are among a growing number of people seeking to give up the 9-to-5 grind before reaching their 60s, which is when most people retire.

How did they get to early retirement and how are they making it work? Let's take a look at what early retirement means and how to get there.

Inside this article

  1. How the Browns retired early
  2. Budgeting for early retirement
  3. How much should I have saved up?
  4. What about health insurance?
  5. Housing in early retirement
  6. Working after retiring
  7. How about Social Security?

How the Browns retired early

Nicole worked as a nurse and Court as an energy trader. They took a year of parental leave before quitting altogether to spend more time with their two children. The Browns, who are part of the FIRE movement (which stands for Financial Independence, Retire Early) saved aggressively on a combined income of a little over $100,000 to achieve financial independence. In their first year of joint early retirement, the two spent just under $40,000 for their family of four.[1]

“I want to encourage people to start tackling your money, see where your savings can go, and focus on your savings rate. A happy life can be a simple life,” says Court.

The Browns live in Alberta, Canada—Nicole is Canadian—but started their financial independence journey in Florida, where they rented out extra rooms to roommates and used the money to aggressively pay off their mortgage.

The Browns also kept rental properties for years, first in Florida and then in Canada, and used the income to pay the mortgage on their primary home. They eventually sold a property that allowed them to pay off their mortgage.

Financial Independence Retire Early: The FIRE Movement

Financial Independence Retire Early: The FIRE Movement

Through aggressive saving and investing strategies the retirement age doesn’t have to be 65 anymore. Following the FIRE movement could have you financially independent by the time you turn 40.

Find out more

Budgeting for early retirement

To retire early, you have to know what your spending will look like in retirement. To calculate your annual spending, determine how much you spend each month on your rent or mortgage, food, utilities, transportation, and other categories. Don’t overlook things like entertainment or travel. Multiply your monthly spending by 12 to calculate your annual spending.

Once you know your annual spending, you can determine how much to save for retirement. One risk for early retirees is our extended life spans.

“Longevity is our biggest risk to running out of money in retirement and an even greater risk if we retire at age 40 or 50 vs. 60 or 70,” says Lynn Toomey, founder of Her Retirement. Setting and sticking to a predetermined budget can help, as can eliminating major expenses like a mortgage.

How much should I have saved up?

The 4% rule is one popular way to figure out how much to save before retiring early. Under the 4% rule, you’ll withdraw 4% of your retirement account every year, adjusting for inflation.[2]

This rule works because, theoretically, annual inflation runs around 3% while the typical portfolio growth is around 7%, leaving 4% to safely withdraw while preserving your account's principal. Of course, with inflation currently running at 40-year highs, people are likely rethinking those numbers.

In any case, here are some examples that follow the 4% rule: If you’re frugal and think you can live on $25,000 per year in retirement, you’d need to sock away $625,000 before retiring early. If you have $40,000 in annual expenses, you’d need to save $1 million before retiring.


The Browns detail their investments and net worth on their website. It's a in-depth look at one family's financial reality, and we highly suggest perusing the very transparent info.

I should probably consider health insurance in this early retirement scenario. What are my options?

Most people will have to purchase private medical insurance, says Toomey.

Toomey recommends tax-exempt Health Savings Accounts, or HSAs, to reduce healthcare expenses. You can contribute $3,650 per year to an HSA or $4,650 if you're over 55; contributions are tax deductible. Since HSA contributions are invested, they accrue money that is untaxed as long as it’s used for medical purposes.[3]

What about my housing plan?

There are psychological benefits to fully owning your home, the Browns note. No mortgage means no monthly housing expenses—and a lower cost of living in retirement.

However, you don’t have to pay off a mortgage to retire early. “I know people who like to hold onto mortgage debt since interest rates tend to be low, especially if you can lock in a 30-year fixed at a low rate, like 2% to 4%,” Court says.

Toomey says it may make sense to keep a mortgage and use the money you would've otherwise spent paying it off on low-risk investments.

“Your house is just as much of an investment as what’s in your portfolio,” Toomey says. There are ways to leverage that home for cash flow in retirement, such as a reverse mortgage.

The Browns and Toomey both note that home repairs are a major housing expense to anticipate. The Browns currently save $375 CAD a month for major home repairs, such as new windows or roof replacement, and $75 CAD a month for general home maintenance.

Whether you decide to own or rent, it’s helpful to work out a housing plan before early retirement. You may have trouble obtaining a mortgage or convincing a landlord to rent to you with no proof of income.

Personal story image

Personal story

Headshot of real estate investor Tom Brickman

How This Movie Theater Manager-Turned-Real Estate Investor "Retired" at 39

Keep reading for more success stories on making early retirement work.

Find out how he did it

Should I consider a part-time or gig economy kind of job after I “retire?”

You certainly can, and you wouldn’t be alone! Some 55% of Americans work part-time or full-time after retirement, according to the Transamerica Center for Retirement Studies.[4]

While raising two small children is their primary focus, the Browns haven’t ruled out side hustles, such as the one-on-one financial coaching services Court currently offers.

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Easy, Smart Ways for Gig Workers to Invest for Retirement

It’s true: With just one investment you can have a “set it and forget it” retirement portfolio that lets you get back to growing your business.

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What about Social Security?

You cannot have your cake and eat it, too. Sorry. The earliest you can get Social Security is age 62, so if you retire early, you'll be self-funding retirement until you can claim benefits.

While you can take Social Security as early as 62, there are financial benefits to waiting.

“Taking Social Security at 62 is a 30% reduction in benefits," Toomey says. You’ll reach full retirement age at 66 or 67, depending on your birth year.

However, if you decide to collect Social Security while still working, your benefit amount may be reduced. If you’re below full retirement age and you go back to work part time, Social Security will deduct $1 of every $2 earned above $19,560. Once you reach full retirement age, if you're still working they deduct $1 for every $3 earned above $51,960.[5]

There are a lot of things to consider before you quit your job for good, but with effective planning and aggressive saving, you too can join the growing ranks of early retirees.

What Is Social Security?

What Is Social Security?

Social Security is a social insurance program intended to prevent poverty in old age, survivorship and disability.

Find out more


What should I know before early retirement?

Top things to know before early retirement, according to AARP, include these facts:

  • People are living longer and longer, so an early retirement may be longer than you have planned and saved for.

  • You may spend more than you think in retirement, particularly if you’re active and traveling.

  • Housing expenses don’t go away when the mortgage does; you’ll still pay things like property taxes and home repairs.

  • Part-time work can be difficult to get and incompatible with other retirement goals, like spending time with family.[6]

Is it better to take Social Security at 62 or 67?
What are the disadvantages of early retirement?
Article Sources
  1. “Quarterly Life & Spending Update: Q2 2022.” ModernFImily.
  2. “Beyond the 4% Rule: How Much Can You Spend in Retirement?.” Charles Schwab. Mar. 7, 2022.
  3. "How does a health savings account (HSA) affect my taxes?" H&R Block.
  4. “19th Annual Transamerica Retirement Survey.” Transamerica Center for Retirement Studies. Dec. 2019.
  5. “Receiving Benefits While Working.” Social Security Administration.
  6. “10 Things No One Tells You About Early Retirement.” AARP. June 17, 2022.
  7. “The Pros and Cons of an Early Retirement.” Metro Credit Union.

About the Author

Lindsey Danis

Lindsey Danis

Lindsey Danis is a writer covering food, travel and personal finance. She's written about personal finance for Business Insider, NextAdvisor, The Penny Hoarder, and elsewhere.

Full bio

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