Can I retire at 55? It’s a question you might be asking yourself if you’re hoping to make an early exit from the workforce. While normal retirement age for most people usually means 65 or older, early retirement could give you more time to do things you enjoy or explore new interests. But it’s important to build a solid financial foundation before leaving your day job behind. Running the numbers can help with deciding if retiring at 55 is a realistic goal. A financial advisor can help you get a realistic estimate of when you may be prepared to retire.
Can I Legally Retire at 55?
There’s nothing in the retirement rulebook that says you can’t retire at 55 years old. In fact, some members of the FIRE (financial independence, retire early) movement aim to retire as early as 40. So it’s perfectly legal to retire in your mid-50s if that’s your goal.
But it’s important to keep in mind that retiring at 55 isn’t the norm for most people. If you’re going by the normal retirement age prescribed by Social Security, for example, that usually means waiting until you’re 66 or 67. And some seniors may choose to delay retirement to their 70s or simply keep working indefinitely.
Can I Retire at 55 and Collect Social Security?
Social Security retirement benefits can be an important part of your financial puzzle. These benefits are designed to provide monthly income in addition to any income you have from qualified retirement accounts, taxable investment accounts, annuities or other sources.
So can you retire at 55 and collect Social Security? The answer, unfortunately, is no. The earliest age to begin drawing Social Security retirement benefits is 62. But there’s a catch. Taking Social Security benefits prior to reaching your normal retirement age results in a reduction of your benefit amount.
Your benefits can also be reduced if you start taking them at age 62 but are still working in some capacity. So, say you retire at 55 from your full-time job but you want to do some consulting work on the side. Once you turn 62, you could claim Social Security retirement benefits but your earnings from consulting work could affect how much you collect.