Scenario Planning

You&rsquo;ve reached your 50s. But are you in good shape to retire? Here&rsquo;s a look at how you compare to others your age, along with helpful information to help you plan an early exit from the workplace.

About This Class

Retiring while in your fifties not only takes a lot of money, it takes a lot of planning. With an average life expectancy of 83.9 years for men and 86.6 years for women, you still have about 40% of your life ahead of you.1&nbsp;
Think about it from a financial perspective. Retiring at 50 rather than 62 causes you to lose 12 years of income. That&rsquo;s the obvious part of the equation. But there&rsquo;s another piece of the puzzle: you&rsquo;ll also be tapping into your savings 12 years earlier. That means you could potentially be losing out on 18 to 24 years worth of savings if you retire in your 50s.&nbsp;
Only about 5% of Americans expect to retire in their early 50s, and another 11% are aiming to exit the workforce between 55 and 59.2 Either way, there are several major considerations you&rsquo;ll want to keep in mind before taking the plunge. In this retirement course, specially designed for you if you&rsquo;re hoping to retire between ages 50 and 59, you&rsquo;ll learn everything you need to know about what&rsquo;s considered &ldquo;early retirement.&rdquo; We&rsquo;ll take you through how to obtain health coverage before Medicare, discuss how to live comfortably before Social Security sets in and much more.&nbsp;
<h3>What You&rsquo;ll Learn in this Class:&nbsp;</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">What to do before you retire. Don&rsquo;t wait until those post-paycheck years to consider these key elements!&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Healthcare. How to handle it and what your options look like.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Investments. Have you saved enough to support an early retirement?&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Benefits. Social Security is still a long way off; here&rsquo;s how to maximize any benefits you may have before that.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Taxes. One of the most confusing aspects of retirement. Here&rsquo;s what you need to know.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Checklist. Are you really ready for retirement?&nbsp;</li>
</ul>

<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Life Expectancy Comparison in 2021.&rdquo; Society of Actuaries, October 2021, <a href="https://www.soa.org/globalassets/assets/files/resources/research-report/2019/life-expectancy.pdf">https://www.soa.org/globalassets/assets/files/resources/research-report/2019/life-expectancy.pdf</a>. Accessed 5 December 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Fewer Than 50 Percent of Americans Think They Will Retire in Their 60s.&rdquo; Nasdaq, 1 July 2017,&nbsp;<a href="https://www.nasdaq.com/articles/fewer-50-percent-americans-think-they-will-retire-their-60s-2017-06-01">https://www.nasdaq.com/articles/fewer-50-percent-americans-think-they-will-retire-their-60s-2017-06-01</a>. Accessed 29 November 2023.</li>
</ol>

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Figuring out how much to save based on when you plan to retire can be tricky. A question you might ask yourself is, &ldquo;Will I need to sacrifice my quality of life in order to retire early?&rdquo; One of the best ways to find the answer is to understand how much you need to save to continue your spending habits.&nbsp;
&nbsp;A successful way to plan your early retirement is through the use of Silvur&rsquo;s Retirement Score. Our Retirement Score shows you how long your savings are projected to last based on how much you&rsquo;ve saved, along with other factors like when you plan to retire and at what age you&rsquo;ll begin taking Social Security benefits. Below, we&rsquo;ll go through an example on how budgeting and spending can put a dent in your savings if you don&rsquo;t plan accurately.&nbsp;
Example
In this example, Ellen has saved $500,000 and intends to live on a budget of $3,000 per month in retirement. She is currently making $60,000 along with her husband, Bob. Ellen and Bob are the same age, they plan to retire by age 57 and elect their Social Security benefits at age 65.
Based on their $500,000 in retirement savings, they can afford to spend $3,000 a month to make sure their savings last longer than their lifetime with a Retirement Score of 98 years and 8 months.
However, if Ellen and Bob spent lavishly at $7,000 a month, they would burn through their savings by age 65. At that spending level, there&rsquo;s a chance that not even a $1,500,000 nest egg would last, with our Retirement Score showing the money running out before age 90.
Now, let&rsquo;s suppose Ellen and Bob have saved $1,500,000 for retirement. By sticking to a budget of $3,000 per month, their money would last through the entirety of their retirement and then some; they&rsquo;d be able to pass money down to future generations according to their Retirement Score of 132.6. And if leaving an inheritance isn&rsquo;t a priority, Ellen and Bob could live a bit more lavishly, spending up to $6,000 per month without much likelihood of running out of money (according to their Retirement Score of 105.3).
<img src="https://cdn.buttercms.com/8it4BymvRlnUfRqEBxqR">
Note: We assume that the Retirement Score is calculated at age 55, retire at age 57, and elect Social Security at 65. Net worth is assumed split between savings and IRA accounts.
<h2>What You Can Do Now</h2>
Wondering where you stand? Start by getting your custom Retirement Score.&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">In Silvur, set your retirement age to the age you&rsquo;d like to retire to see how that changes your Retirement Score.</li>
<li style="font-weight: 400;" aria-level="1">Review your elections, retirement accounts, and expenses to determine your Silvur Retirement Score. That will give you a more accurate sense of whether you have saved enough to retire.</li>
</ul>

Part of planning for an early retirement involves taking a few crucial steps while you&rsquo;re still working. Let&rsquo;s take a look at some of them below.&nbsp;
<h2>1. Draw Up a Workable Budget</h2>
Perhaps more important than any other step you&rsquo;ll take (and applicable at any age, by the way!) is coming up with an all-encompassing budget for your household. Doing so will force you to look at how much you&rsquo;re (really!) spending, where your money is going and where you can make cuts.&nbsp;
Another consideration? Nail down your current monthly budget, then figure out what you think your monthly budget will look like once you&rsquo;re in retirement. You&rsquo;ll find subtle differences, like less money spent on gas, clothing and lunches out, but other expenses might actually increase in retirement (ahem - healthcare). Since you&rsquo;ll be living without a paycheck in retirement, and for many years without even the assistance of Social Security benefits, it&rsquo;s crucial to have a firm grasp on exactly how much money you&rsquo;ll need to live on a month-to-month basis.&nbsp;
Based on the previous lesson, &ldquo;How Long Your Savings Will Last By Budget,&rdquo; we show you how much you could afford to spend a month based on your net worth. However, your spending should account for monthly healthcare premiums, cost-of-living expenses, and any other taxes you&rsquo;ll incur now and throughout retirement.&nbsp;
<h2>2. Maximize Contributions to Retirement Accounts</h2>
Especially if you&rsquo;re planning to retire in your fifties, you&rsquo;ll need to have contributed the maximum amount possible to your retirement accounts over the course of your working years. You&rsquo;ll lose out on a great deal of earning power if you exit the workforce this early, so it&rsquo;s crucial to plan accordingly. Current contribution limits for 401k accounts are $23,000 and for IRAs, the limit is $7,000.
<h2>3. Make Catch-Up Contributions</h2>
Part of what you&rsquo;ll miss out on by retiring in your fifties is catch-up contributions. Starting at the age of 50, you&rsquo;re eligible to contribute more to your retirement accounts, like your 401k and IRAs. IRA accounts are pretty strict when it comes to catch-up contributions: you can only contribute an additional $1,000 above the $7,000 limit. But you can add an additional $7,500 as a catch-up contribution to your 401(k) if you&rsquo;re over 50. If you plan to retire in the next few years, max out your IRA and 401(k) catch-up contributions. This could mean another $42,500 in five years, and that doesn't even take compounding interest into account!
<h2>4. Review Long-Term Care and Life Insurance</h2>
Proper insurance is another way to further protect your finances if you&rsquo;ll be retiring before your earning years are over. While you&rsquo;re still working, it&rsquo;s a good time to ensure you&rsquo;re covered with all the insurance you might need during retirement. We&rsquo;ll touch more on this later in our lesson called, &ldquo;Long-Term Care and Life Insurance.&rdquo;&nbsp;
<h2>5. Refinance or Downsize Your Home</h2>
This isn&rsquo;t a step you&rsquo;ll want to save for after retirement, when it&rsquo;ll be harder to secure a good loan without a steady paycheck. So if you know you&rsquo;ll save a great deal of money every month by refinancing your home, or if you&rsquo;re planning on purchasing a much smaller dwelling to live out your retirement period, it&rsquo;s best to tackle this before you retire.&nbsp;
<h2>6. Fully Fund Your HSA</h2>
A well-funded HSA can be a huge help for anyone, but that&rsquo;s particularly the case if you&rsquo;re hoping to retire long before Medicare kicks in. All healthcare options for retirees who don&rsquo;t yet qualify for Medicare are expensive; there&rsquo;s no way around that (see Lesson &ldquo;Early Retirement Healthcare Option&rdquo; for a breakdown), and an HSA allows you to withdraw the money you&rsquo;ve saved to use on qualified medical expenses at any age.&nbsp;
You&rsquo;ll pay more out of pocket for an HSA, but your working years are the best time to do this, since it&rsquo;s easier to shoulder while you&rsquo;re working rather than after you retire. You&rsquo;ll end up with an HSA that can double as an investment vehicle once you turn 65. What&rsquo;s more, you can continue to fund your existing HSA even during retirement (until you enroll in Medicare, that is). To learn more about HSAs, see our class &ldquo;<a href="/retirement-school/hsa-for-early-retirement-healthcare" rel="follow noopener" target="_blank">Health Spending Accounts (HSA)</a>.&rdquo;
<h2>7. Review Portfolio Allocation</h2>
One thing you may wonder about as you approach retirement is whether your money is invested properly. Do you have the right mix of aggressive and conservative investments? It&rsquo;s only natural to want to &ldquo;de-risk&rdquo; your portfolio as retirement approaches. But remember, if you&rsquo;ll be retiring in your fifties, you&rsquo;ve still got to account for three to four decades of inflation. So you want a mix of assets that allow mostly for safe growth, with a portion of more aggressive funds that can help protect your earnings and keep your future income similar to today&rsquo;s.&nbsp;
To determine the best asset allocation, first consider your budget: where do you stand as you approach your retirement years? Are your finances lacking anything, or do you have more than enough to make it through? In considering these questions, be sure to include all of your income streams for accuracy.&nbsp;
Once you understand how much you need to rely on your portfolio to cover your spending, then you can determine how much risk you want to take in your portfolio. If you&rsquo;ll be relying heavily on your investments for daily living in retirement, it&rsquo;s important to avoid too much risk and keep&nbsp; most of your money in more conservative investments, like the one shown below.&nbsp;
But if you&rsquo;re in your fifties with many years of retirement left and plenty of money saved, and you&rsquo;re not yet relying on your investments to cover expenses, it&rsquo;s perfectly okay to keep a larger portion of your investments in aggressive funds.&nbsp;
<h2>8. Build an Emergency Fund</h2>
If you don&rsquo;t already have one, a stash of liquid assets like cash at the ready is always a good thing to have before you retire. But in this case, more truly is better. Make it a goal to save six to twelve months of expenses if possible.

Whether you are married, single, divorced or widowed can impact your retirement in myriad ways. Consider how your marital status could affect your plans, as well as steps you can take to improve your situation regardless.
<h2>Married Couples</h2>
Married couples face advantages and disadvantages when it comes to retirement. With two people retiring together, you&rsquo;ll need twice as much cash to cover daily living expenses like food, utility bills and healthcare. Also, decisions you make in retirement as an individual in a marriage can adversely affect the other person.&nbsp;
However, having another person to lean on can be immensely helpful since you can make decisions together and take care of one another. Married couples can also choose to have one or both partners continue working part-time to increase retirement income or delay withdrawals from investment accounts.
In addition, there are other strategies for married couples when it comes to Social Security and Medicare. For example, Social Security election age is important especially if one relies on the other&rsquo;s benefits. Typically, females live longer than males so if one elects too early, this might end up hurting the other spouse&rsquo;s spending in the future. You can learn more strategies in our class &ldquo;<a href="/retirement-school/social-security-for-married-couples" rel="follow noopener" target="_blank">Social Security Benefits for Married Couples.</a>&rdquo;&nbsp;
For spouses who have a large age gap, you can potentially save money on healthcare costs by enrolling into your younger working spouse&rsquo;s healthcare plan even if you&rsquo;re eligible for Medicare. But there are rules to know if you plan to delay your enrollment which you can learn more in our &ldquo;<a href="/retirement-school/medicare-101" rel="follow noopener" target="_blank">Medicare 101</a>&rdquo; class. 
<h2>Singles</h2>
Being single in retirement can be immensely beneficial in some ways. For example, you can opt for a smaller living space, and you only need to have enough assets to pay for monthly expenses for yourself. However, being single in retirement can also mean paying for regular living expenses entirely on your own, and having to make an array of important decisions all by yourself.&nbsp;
To best assess your finances and Social Security benefits, you need to factor in your longevity. If you plan to live a long life, it might not be wise to collect benefits early at a reduced rate. It might make more sense to build up your savings to carry you over while you delay your Social Security election age to increase your benefits. For a more detailed explanation on when to elect benefits, you can read our class &ldquo;<a href="/retirement-school/social-security-benefits-for-singles" rel="follow noopener" target="_blank">Social Security Benefits for Singles.</a>&rdquo; 
One great option to lessen the burden of retirement is to find a roommate you trust and get along with. It&rsquo;s a great way to help each other out, reduce bills like food and utilities, and have company when you want it as well.&nbsp;
<h2>Divorced or Widowed&nbsp;</h2>
Being divorced or widowed can leave you in a similar position in retirement as if you were initially single. However, you're more likely to have access to remaining benefits such as a pension or spousal Social Security benefits. Make sure you have a plan to maximize any spousal benefits currently being paid out to you, as well as those you expect to receive in the future. If you&rsquo;re a widow or widower, you can draw survivor benefits as early as age sixty without affecting your own benefits, and while you&rsquo;re still gainfully employed. This is key, since it allows you to keep working and building both your nest egg and your own Social Security benefits which you can learn more about in our class &ldquo;<a href="/retirement-school/social-security-benefits-for-widows" rel="follow noopener" target="_blank">Social Security Benefits for Widow(er)s.</a>&rdquo;&nbsp;
Benefits work a bit differently for divorced spouses, though. If you were married for more than 10 years and you&rsquo;re now divorced, you&rsquo;re entitled to 50% of your ex-spouse&rsquo;s Social Security benefit amount. If your own Social Security benefits are higher, though, you&rsquo;ll automatically receive that higher amount and your ex-spouse&rsquo;s benefits won&rsquo;t come into play. Do keep in mind though, if you are receiving spousal benefits, you can only get the maximum benefit amount when you hit Full Retirement Age. Filing before that will reduce the benefits you&rsquo;re entitled to. Understand what the rules are to maximize your ex-spousal benefits at &ldquo;<a href="/retirement-school/divorced-social-security-benefits" rel="follow noopener" target="_blank">Social Security Benefits for Divorced Couples.</a>&rdquo; 
Finally, for widowed or divorced, remember that these are both considered qualifying life events for the purpose of healthcare enrollment. So be sure to use that to your advantage if you still need to sign up.&nbsp;

Retiring from the workforce just as you enter your fifth decade of life means you still have ten to fifteen years until you&rsquo;re eligible for Medicare. That means you&rsquo;ll likely spend hundreds of thousands of dollars funding your own health coverage in the ensuing years.&nbsp;
A 65-year old couple retiring this year can expect to spend $315,000 in health care and medical expenses throughout retirement. For single retirees, the 2023 estimate is $157,000.1
So no matter how tempting it may be to tell your boss goodbye, first be sure you can shoulder the heavy burden that healthcare can be. That&rsquo;s money you could use during retirement, and this is no time to run out! For more information on healthcare in early retirement, be sure to check out our course entitled &ldquo;<a href="/retirement-school/early-retirement-healthcare-101" rel="follow noopener" target="_blank">Early Retirement Healthcare 101.</a>&rdquo;
In the meantime, here are some of the options you have if you decide to retire before you&rsquo;re eligible for Medicare.&nbsp;
<h2>Spouse&rsquo;s Insurance</h2>
The easiest and most cost-effective way to get health insurance in early retirement is to be added on to your spouse&rsquo;s company insurance plan.&nbsp;&nbsp;
<h2>Employer-Sponsored Health Insurance</h2>
Though this valuable benefit has seen a steady decline in recent decades, some large companies (over 200 employees) do still offer health benefits to retirees. It&rsquo;s estimated that only about 30% of companies offer these types of plans anymore, but if yours does, this could be a great way to continue your coverage until Medicare kicks in. These plans are often your least expensive option, and the best news is that it&rsquo;s likely to be insurance you&rsquo;re familiar with.2
<h2>COBRA</h2>
COBRA provides 18 months of coverage under your current employer&rsquo;s plan, but there are two major drawbacks for you to consider if you&rsquo;re hoping to retire in your fifties.
<ul>
<li style="font-weight: 400;" aria-level="1">You&rsquo;ll shoulder the full cost of the premium (where before it was shared with your employer); COBRA coverage is good, but it is one of the most costly options. The average monthly premium amount for an individual on COBRA is $703 and for a family, $1,997.3</li>
<li style="font-weight: 400;" aria-level="1">This is only a short-term option that won&rsquo;t get you anywhere close to Medicare age (65) if you&rsquo;ll be retiring in your early 50s. Even if your target retirement age is closer to the end of your fifties, you&rsquo;ll still need another insurance plan to cover you until you are eligible for Medicare.</li>
</ul>
<h2>Affordable Care Act (Obamacare)</h2>
The average cost of an ACA individual plan is $430 per month, and family plan $1,159.4 It&rsquo;s an expensive solution, but the good news is that you can&rsquo;t be denied coverage regardless of age or health condition. If you&rsquo;re in your 50s, expect to pay around $766 for ACA coverage, but expect your costs to increase towards $1,163 as you approach 60.5
ACA premiums can be reduced if you are eligible for advance premium credits. These are based on income and taxable household size. Penalties apply if you underestimate your income and pay a lower rate, so it&rsquo;s better to overestimate income on your application.&nbsp;
Note: You must apply for this insurance within 60 days before or after retiring. Check out our Early Retirement Healthcare course for more information on the Affordable Care Act.
<h2>Short-Term Health Insurance</h2>
Another stop-gap insurance plan is a short-term medical plan. This type of plan could be an option for you if you&rsquo;re in good health, have no chronic medical conditions, rarely see a doctor and take few to no prescriptions. That&rsquo;s because coverage is minimal, and expenses above basic medical needs can add up quickly.&nbsp;
Before deciding on a short-term medical plan, it&rsquo;s important to know that you can expect very high deductibles, even though the monthly payment tends to be reasonable. For a 55-year-old non-smoking female living in &nbsp;Virginia, you could expect to pay anywhere from $260 to $657 per month for a 6-month plan with a $5,000 to $10,000 deductible.6 But chronic or pre-existing conditions can increase premiums or even disqualify you for a short-term medical plan, unlike an ACA plan. Short-term medical plans last for up to a year and can be canceled at any time.
<h2>Find Part-Time Work That Offers Insurance</h2>
You&rsquo;re only in your fifties. It&rsquo;s not improbable that you may want to pursue another occupation or open your own business. Be sure to do what you love, but try to find a gig that offers insurance benefits.&nbsp;
<h4>SOURCES</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Fidelity Releases 2023 Retiree Health Care Cost Estimate: For The First Time In Nearly A Decade, Retirees See Relief As Estimate Stays Flat Year-Over-Year.&rdquo; Fidelity Investments, 21 June 2023, <a href="https://preview.thenewsmarket.com/Previews/FINP/DocumentAssets/645024.pdf">https://preview.thenewsmarket.com/Previews/FINP/DocumentAssets/645024.pdf</a>. Accessed 18 October 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2023 Employer Health Benefits Survey.&rdquo;kff.org, 18 October 2023,&nbsp;<a href="https://www.kff.org/report-section/ehbs-2023-section-1-cost-of-health-insurance/">https://www.kff.org/report-section/ehbs-2023-section-1-cost-of-health-insurance/</a>. Accessed 14 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">Ilbd.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Plan Year 2024 Qualified Health Plan Choice and Premiums in HealthCare.gov Marketplaces.&rdquo; CMS.gov, 25 October 2023,&nbsp;<a href="https://www.cms.gov/files/document/2024-qhp-premiums-choice-report.pdf">https://www.cms.gov/files/document/2024-qhp-premiums-choice-report.pdf</a>. Accessed 13 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2024 QHP landscape data.&rdquo; healthcare.gov,&nbsp;<a href="https://www.healthcare.gov/health-plan-information-2024/">https://www.healthcare.gov/health-plan-information-2024/</a>. Accessed 13 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Short-Term Health Insurance.&rdquo; eHealth,&nbsp;<a href="https://www.ehealthinsurance.com/short-term-health-insurance">https://www.ehealthinsurance.com/short-term-health-insurance</a>. Accessed 29 November 2023.</li>
</ol>

Your fifties are the perfect time to take out an insurance policy. You&rsquo;re still young and healthy, and you&rsquo;re still earning money (assuming you haven&rsquo;t retired already). Two types of insurance that can be crucial to any retirement period are long-term care insurance and life insurance. If you know you&rsquo;ll be retiring in your early fifties, the time to initiate these policies would be your mid-forties.&nbsp;
<h2>Long-Term Care Insurance&nbsp;</h2>
The staggering cost of healthcare continues to be one of the biggest budget-busters for retirees. A 65-year-old couple retiring today should expect to spend about $315,000 on healthcare expenses over the course of their lifetime. And since you&rsquo;re planning an early retirement, your bill could be even higher.&nbsp;
Sadly, those large figures don&rsquo;t include long-term care, like time spent in a nursing home or rehabilitation facility. One year in a nursing home can cost $103,700 for a semi-private room, and an assisted living facility isn&rsquo;t much cheaper, costing $59,007.1 Long-term care insurance can help offset these enormous bills, and other key services like in-home care, palliative and hospice care, and Alzheimer&rsquo;s facilities, should you ever need this type of care. And there&rsquo;s a good chance you might: estimates indicate about 70 percent of people over the age of 65 will require long-term care services during their lifetime.2
If you're hoping to retire in your fifties, you&rsquo;ll want to look into obtaining a long-term care insurance policy in your forties, while you&rsquo;re still working. You&rsquo;ll likely have the advantage of doing well on the required health exams, but know that premiums for long-term care insurance aren&rsquo;t guaranteed and do increase over time. Still, though premiums can be steep (average 2023 annual premiums for 55-year-olds are $900 for a single, man, $1,500 for a single woman, and $2,080 for a couple), they more than pay for themselves if you do need to make a claim against your long-term care policy.3
<img src="https://cdn.buttercms.com/6TSCG1ahSk2unBgUnDRz">
<h2>Life Insurance</h2>
Do you need life insurance in retirement? It&rsquo;s a common question with a relatively simple answer: if there&rsquo;s someone who depends on you for their welfare, like a disabled adult child or a younger spouse, you should have life insurance. And in some cases, such as with a permanent life plan, your life insurance policy may come with a &ldquo;cash value&rdquo; component that can be used as additional income in retirement. You can take a loan from the cash value portion of your policy, then pay it back over time, or simply have the amount reduced from the final payout your loved ones will receive upon your passing.4
The monthly premium for a life insurance policy can vary widely based on a number of factors, like your age, current health, smoking status and more, but estimates indicate the average monthly cost of life insurance is typically between $62 and $281 for 55-year-olds.5
The two main types of life insurance policies available to you are term life and whole life.
<h3>Whole Life Insurance</h3>
A whole life plan is a life insurance plan that lasts for your whole life. There&rsquo;s no need to worry about keeping track of when your plan ends; it&rsquo;s set up to end when you pass. If you opt for a whole life insurance plan, you&rsquo;ll choose between a permanent plan and a universal plan.&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Whole life Permanent. With a permanent plan, your premiums stay the same each month (or year if you choose to pay your premiums annually).</li>
<li style="font-weight: 400;" aria-level="1">Whole life Universal. If you have a universal plan, you&rsquo;ll enjoy flexible premiums that allow you to pay less or more depending on your financial situation. This type of plan requires a bit of extra discipline though; paying lower premiums for a long time sets you up for a larger bill later on, which isn&rsquo;t exactly beneficial as you approach retirement.</li>
</ul>
Whole life insurance tends to be more expensive than term life because of lifelong coverage, cash value accumulation, and even potential dividends. On average, if you purchase a whole life policy in your 50s, you can expect a monthly rate of $116 to $678 depending on your policy amount, gender, and age. But you&rsquo;ll notice that it's better to purchase when you&rsquo;re younger to lock in a smaller monthly premium.6
<h3>Term Life Insurance</h3>
Unlike whole life, term life insurance lasts for a finite amount of time. Most policies last 10 or 20 years, after which you have to sign up for a new policy or go without coverage. While term life is less expensive to purchase than whole life, keep in mind that starting a new policy becomes more expensive as you age, which is a drawback of term life insurance. That&rsquo;s why, like long-term care insurance, it&rsquo;s a good idea to purchase life insurance while in your fifties and still relatively healthy. On average, a healthy, 50-year-old non-smoker can expect around a $140 monthly premium for a $500,000 30-year term life policy.7
Overall, life insurance helps decrease financial burden on your family if you pass and could be used as another savings vehicle should you retire early.&nbsp;

<h4>SOURCES</h4>
<ol>
<li>&ldquo;Cost of Long Term Care by State: Cost of Care Report.&rdquo; Genworth, <a href="https://www.genworth.com/aging-and-you/finances/cost-of-care.html">www.genworth.com/aging-and-you/finances/cost-of-care.html</a>. Accessed 30 November 2023.</li>
<li>&ldquo;How Much Care Will You Need?&rdquo; LongTermCare.gov, 18 February 2020,&nbsp;<a href="https://acl.gov/ltc/basic-needs/how-much-care-will-you-need">https://acl.gov/ltc/basic-needs/how-much-care-will-you-need</a>. Accessed 30 November 2023.</li>
<li>&ldquo;2023 Long-Term Care Insurance Information.&rdquo; American Association for Long-Term Care Insurance,&nbsp;<a href="https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2023.php">https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2023.php</a>. Accessed 30 November 2023.</li>
<li>&ldquo;How to Use Life Insurance for Retirement.&rdquo; John Hancock,&nbsp;<a href="https://www.johnhancock.com/ideas-insights/how-to-use-life-insurance-for-your-retirement.html">https://www.johnhancock.com/ideas-insights/how-to-use-life-insurance-for-your-retirement.html</a>. &nbsp;Accessed 30 December 2023.</li>
<li>&ldquo;The Policygenius Life Insurance Price Index November 2023.&rdquo; Policygenius,&nbsp;<a href="https://www.policygenius.com/life-insurance/life-insurance-price-index/november-2023/">https://www.policygenius.com/life-insurance/life-insurance-price-index/november-2023/</a> Accessed 30 November 2023.</li>
<li>Bibey, Chris. &ldquo;How Much Does Whole Life Insurance Costs? Rates &amp; Charts.&rdquo; Top Whole Life, 24 August 2022,&nbsp;<a href="https://topwholelife.com/whole-life-insurance-faqs-much-whole-life-insurance-cost">https://topwholelife.com/whole-life-insurance-faqs-much-whole-life-insurance-cost</a>. Accessed 30 November 2023.</li>
<li>&ldquo;Term Life Insurance Quotes.&rdquo; Quotacy,&nbsp;<a href="https://www.quotacy.com/term-life-insurance-quotes">https://www.quotacy.com/term-life-insurance-quotes</a>. Accessed 30 November 2023.</li>
</ol>

If you choose to retire between 50 and 59, you&rsquo;ll have to wait between 3 to 12 years before you receive Social Security benefits. And if you&rsquo;re in the early part of your fifties, you&rsquo;ll need to last a few years before you&rsquo;re able to make penalty-free withdrawals from your 401(k) and IRA accounts. And remember to account for inflation if you plan to survive several decades on your current savings.&nbsp;
<h2>Average Retirement Savings: Age 50 to 59</h2>
Let&rsquo;s see how your savings stack up against others in their fifties. The average retirement savings for someone between 45 and 55 is $313,220; and for those 55 to 64, the average retirement savings is $537,560.1 Looking at the example about Bob and Mary in the earlier lesson &ldquo;How Long Your Savings Will Last By Budget,&rdquo; it&rsquo;s clear that you&rsquo;ll need quite a bit more in your nest egg in order to live several decades without drawing a paycheck. 
After all, with savings of $500,000 - more than twice the average savings of those 45 to 55 - Bob and Mary would run out of money in their early-seventies at a monthly spending amount of $4,000. Reducing that amount by half (spending only $2,000 per month) would certainly allow their money to last longer, but can they survive on that amount? Can you? It&rsquo;s all about figuring out your monthly budget, then weighing your numbers against your savings and your retirement score to see if you&rsquo;re where you need to be. Below, we&rsquo;ll discuss how to make your retirement accounts work for you if you&rsquo;re planning an early retirement.&nbsp;
<h2>401(k)</h2>
The average 401(k) balance for 50-59 year olds is $160,000. The median balance is $60,900. Although the median figure is a more realistic indicator of the average person&rsquo;s situation, you&rsquo;ll need more than either of these amounts if you plan to retire in your 50s and draw income for the rest of your life.2
If you have a well-funded 401(k), that&rsquo;s excellent. But don&rsquo;t count on withdrawing anything from it until you reach 59 &frac12;. Otherwise, you&rsquo;ll be paying a big chunk in penalties and taxes. If you&rsquo;re in need of funds earlier, you can enact the &ldquo;Rule of 55&rdquo; (if you&rsquo;ve reached age 55) and pull money from your most current 401(k), assuming you have more than one. Under this rule, you can pull money from your most current 401k without penalty if you&rsquo;ve hit age 55. But this only applies to that 401k, not those still held by former employers.
If your 401(k) account falls short of what you need, remember, once you reach 50, you can make catch-up contributions. In 2024, you can add an additional $7,500 per year for a total allowable contribution (including catch-up contributions) of $30,500. This is something to weigh heavily if you&rsquo;re considering retiring in your 50s. You&rsquo;ll be exiting the workplace during a decade that could otherwise be one of the biggest wealth-building decades of your life. There&rsquo;s no doubt that ten to twenty years of extra contributions will give your 401(k) a healthy boost.&nbsp;
<h2>Individual Retirement Account (IRA)</h2>
Once your employer has maxed out matching your 401(k) contributions, it&rsquo;s a good idea to consider other investment options, like an IRA or Roth IRA.
If you are planning to retire in your 50s, hopefully you&rsquo;ve been contributing to an IRA for years because they offer great tax advantages. A traditional IRA allows tax-deductible contributions but taxes withdrawals. On the other hand, a Roth IRA taxes contributions but, after age 59 &frac12;, allows for tax-free withdrawals. In 2024, the contribution limit to your IRA is $7,000 up to age 50 and $8,000 thereafter. &nbsp;
<h3>How much should I have in my IRA at 55?&nbsp;</h3>
While everyone&rsquo;s goals and dreams are different, many people who aim to retire in their 50s have been saving since that first paycheck. Indeed, if you contributed the maximum amount to an IRA starting at age 23, you could now be sitting on a nest egg of more than $700,000 in your IRA. If that&rsquo;s the case, be sure to enter this into the Silvur app when you calculate your Retirement Score. Savings like this could be the difference between a Retirement Score that says you&rsquo;re ready to retire, and one that indicates you need to take another look at your strategy.&nbsp;
<h2>Roth Conversions</h2>
Another strategy for early retirees is a Roth conversion. Here, you&rsquo;ll convert your assets to a Roth IRA, allowing your money to continue to grow tax free. And when the time comes, you&rsquo;ll also benefit from tax-free withdrawals. Roth conversions will work in your favor if you think your retirement income will increase or stay the same as your current income, because it will decrease your future tax bill on withdrawals. There&rsquo;s no limit on how much money you can convert to a Roth IRA. But however much you do convert, know that it will count as taxable income which could bump you into a higher tax bracket.&nbsp;
Here&rsquo;s a tip: consider spreading your conversions over time if your income stays relatively consistent year over year. This will ensure you don&rsquo;t get a big tax bill by converting all at once.
As a reminder, you&rsquo;ll be subject to Required Minimum Distributions (RMDs) once you hit 73 (or 72 depending on your birth year) and by converting qualified RMD accounts&mdash;like IRAs and 401(k)s&mdash;into a Roth IRA, you&rsquo;ll not be subject to RMDs and have tax-free withdrawals.
<h2>Pension</h2>
If you&rsquo;ve earned a pension during your working years, it&rsquo;s yet another tool that can get you closer to your goal of retiring in your fifties. While state pensions don&rsquo;t start paying out until you reach age 66, you can withdraw money from most workplace or personal pensions when you turn 55. It&rsquo;s important to check the exact rules for your pension, since they&rsquo;re all different.&nbsp;
Per the Pensions Right Centers, the median private pension benefit of individuals age 65 and older was $11,040 a year. The median state or local government pension benefit was $24,980 a year.3
You can withdraw money from your pension as a lump sum or a monthly payout. A good way to support an early retirement is to take the money as a lump sum payout and invest it in an ETF or mutual fund to let it continue to grow. This strategy is best if you have experience managing your own investments.&nbsp;&nbsp;
<h4></h4>
<h4>SOURCES</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">Benson, Alana. &ldquo;What Is the Average Retirement Savings by Age?&rdquo; NerdWallet, 24 October 2023, <a href="https://www.nerdwallet.com/article/investing/the-average-retirement-savings-by-age-and-why-you-need-more">https://www.nerdwallet.com/article/investing/the-average-retirement-savings-by-age-and-why-you-need-more</a>. Accessed 30 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">Milena. &ldquo;Average 401k Balance by Age - Stats &amp; FAQs.&rdquo; BalancingEverything, 3 March 2023,&nbsp;<a href="https://balancingeverything.com/average-401k-balance-by-age">https://balancingeverything.com/average-401k-balance-by-age</a>. Accessed 30 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Income from Pensions.&rdquo; Pension Rights Center, 23 October 2023,&nbsp;<a href="https://pensionrights.org/resource/income-from-pensions/">https://pensionrights.org/resource/income-from-pensions/</a>. Accessed 30 November 2023.</li>
</ol>

Social Security might be a buzzword among retirees, but this benefit won&rsquo;t be in the cards for you if you retire in your fifties. That is, unless your spouse has already passed by this point and you&rsquo;re entitled to survivor benefits. Those can begin as early as age 50 if you&rsquo;re disabled, but you can receive benefits at any age if you&rsquo;re providing care for minor or disabled children who belonged to your spouse who has passed.&nbsp;
If neither of those situations applies to you, you&rsquo;ll need to wait quite a while before recognizing your Social Security benefits. But before you leave the workforce, remember that Social Security takes the highest 35 years of your earnings in order to calculate your future benefits. If you haven&rsquo;t put in that many years, a zero will be entered for each year below 35, which will drastically reduce your benefits. So be sure you&rsquo;ve hit that mark before giving notice.
The earliest you can draw from Social Security is 62. But if you choose to do this, your benefits will be reduced for the rest of your life if you opt to start receiving benefits at such a young age. The &ldquo;prime&rdquo; time to start collecting Social Security benefits is what&rsquo;s called &ldquo;Full Retirement Age,&rdquo; which for most people is between the ages of 66 and 67. Unless you&rsquo;ve saved a great deal of money, it can be mind-boggling to think that if you retire at 50, you might have to wait a whopping 17 years before being able to add Social Security benefits to your monthly income. But electing at the earliest possible time - age 62 - will cause you to see a lifetime decrease in benefits by as much as 30% compared to electing at FRA.&nbsp;
Retiring without benefits is difficult, but it&rsquo;s not impossible. Short-term savings accounts, like CDs and money market accounts, can help you through the years before you&rsquo;re able to start tapping into retirement accounts and Social Security benefits.&nbsp;

We&rsquo;ve covered how crucial it is to plan for retirement if you&rsquo;re hoping to retire in your fifties. Between the high cost of healthcare, the years of wealth building you&rsquo;ll be missing out on, and the lack of Social Security benefits, retiring in your fifties certainly isn&rsquo;t for the faint of heart. What&rsquo;s more, there&rsquo;s another hurdle you&rsquo;ll need to overcome: taxes in retirement.&nbsp;
<h2>Taxes on Social Security benefits</h2>
It may not affect you early on in retirement when you&rsquo;re not yet collecting benefits, but it&rsquo;s important to know that your Social Security income could be subject to taxes. The tax rate is based on your combined income. You can determine your combined income by adding the following: Your adjusted gross income + nontaxable interest + &frac12; of your Social Security Benefits.
If your combined income is:
<ul>
<li style="font-weight: 400;" aria-level="1">$34,001 or more ($44,001 or more if you&rsquo;re married filing jointly), up to 85% of your benefits will be subject to federal tax.</li>
<li style="font-weight: 400;" aria-level="1">Between $25,000 to $34,000 (or between $32,000 and $44,000 as a joint filer), you&rsquo;ll be taxed on 50% of your benefits.&nbsp;</li>
</ul>
And if you live in any of the 10 states listed below, you could also be subject to state-level taxes on your benefits. The following states are considered not-so-friendly to retirees from a tax perspective: Colorado, Connecticut, Kansas, Minnesota, Montana, Nebraska, New Mexico, Rhode Island, Utah and Vermont.1&nbsp;
To learn more about the specifics of each state&rsquo;s Social Security tax policy, take a look at our course called, &ldquo;<a href="/retirement-school/your-government-benefits-are-subject-to-taxes" rel="follow noopener" target="_blank">Your Government Benefits Are Subject To Taxes.</a>&rdquo;
<h2>Taxes Based on Location</h2>
Where you live may have a big factor on your taxes. Not only will cost-of-living and healthcare expenses differ by location, but federal and state taxes are based on where you live. This can have a big impact on your retirement savings everytime you withdraw. And if you plan to leave an estate, your estate could be taxed federally and at the state level. Alternatively, if you receive an inheritance, you&rsquo;d also be subject to taxes based on your location.&nbsp;
Read our class, &ldquo;<a href="https://www.silvur.com/retirement-school/how-location-impacts-taxes" rel="follow noopener" target="_blank">How Location Impact Taxes</a>,&rdquo; to get a deeper look at how much each state taxes as well as any special tax deductions for older Americans. In addition, go to our Cost of Living calculator to compare different tax rates and see if moving impacts your Retirement Score.
<h2>Taxes on Investment Accounts</h2>
Retiring early could make it tempting for you to make early withdrawals from your retirement accounts. But doing so could result in heavy penalties (aside from the interest you&rsquo;d be missing out on!). Early withdrawals from tax-deferred accounts will result in a 10% penalty. So, for example, if you withdraw $10,000, you&rsquo;ll face $1,000 in penalties, which will reduce the amount of money you&rsquo;ll be able to use. In addition, the entire amount of the withdrawal ($10,000 in this example), will be taxed as income at the end of the year.
If your money is sitting in a Roth account, it can continue to grow untouched. But if you withdraw your earnings before you reach the age of 59 &frac12;, you will likely have to pay taxes along with a 10% penalty.&nbsp; The IRS does allow for some penalty-free withdrawals before age 59 &frac12;, called &ldquo;Qualified Distributions&rdquo; if you meet specific requirements, such as:2
<ul>
<li style="font-weight: 400;" aria-level="1">If you become permanently disabled.</li>
<li style="font-weight: 400;" aria-level="1">For qualified college education expenses.</li>
<li style="font-weight: 400;" aria-level="1">For qualified birth or adoption expenses.</li>
<li style="font-weight: 400;" aria-level="1">To purchase your first home (there is a $10,000.00 lifetime cap).</li>
</ul>
If you meet one of these scenarios, you can avoid paying the early withdrawal penalty, but you may still have to pay taxes on your earnings.
If you have money in tax-deferred accounts like a traditional 401(k) or 403(b), SEP, or traditional IRA at the time you turn 73 (or 72 if you were born before December&nbsp; 31,1950), you will be required to take yearly distributions called Required Minimum Distributions, or RMDs. These amounts are then treated as taxable income. Learn more about RMDs in our class &ldquo;<a href="/retirement-school/taxes-in-retirement-101" rel="follow noopener" target="_blank">Taxes in Retirement 101</a>.&rdquo;
If you&rsquo;ve had a life-long dream of retiring in your fifties, you likely have money saved in several different types of accounts-- some of which are taxable and others which are not. What you may not realize is that you can drastically minimize the impact to your taxes by making strategic choices about the order in which you withdraw money from these accounts. This is referred to as withdrawal sequencing.&nbsp;
If you have multiple types of accounts, sequencing your withdrawal of funds can be a significant tax advantage, and there are a few different ways to go about it. Always be sure to keep RMDs in mind when deciding which withdrawal strategy to employ.&nbsp;
Below, we&rsquo;ve included a section from our &ldquo;<a href="/retirement-school/taxes-in-retirement-101" rel="follow noopener" target="_blank">Taxes in Retirement 101</a>&rdquo;&nbsp;course that outlines different withdrawal strategies you could employ. Choosing the right strategy will ensure you&rsquo;re able to hang on to as much of your hard-earned money as possible during your long retirement.&nbsp;
Taxable First, then Tax-Deferred
<ul>
<li style="font-weight: 400;" aria-level="1">Withdraw from taxable accounts first (Social Security, annuities, other forms of earned income)</li>
<li style="font-weight: 400;" aria-level="1">Then start to draw down tax-deferred accounts (401(k)s, traditional IRAs, etc.)</li>
<li style="font-weight: 400;" aria-level="1">Leave the tax-exempt accounts (Roth IRA or Roth 401(k)) for last</li>
</ul>
Doing this allows you to potentially benefit from a lower tax rate and prioritizes leaving an inheritance for your heirs.
Taxable First, then Tax-Exempt:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Drawdown taxable accounts first, like the first method,&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Then draw down the tax-exempt accounts (your Roth accounts),&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Finally, start drawing on the tax-deferred accounts (401(k)s, etc.).&nbsp;</li>
</ul>
This method reduces your tax bill throughout retirement and can make sense if you anticipate a lower tax rate in the future when you start drawing from the tax-deferred accounts.&nbsp;
Tax Bracket Management:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Start with your tax-deferred accounts (e.g., IRA &amp; 401K accounts) first, but only up to a specific tax bracket (e.g. 12%, 22%, etc),</li>
<li style="font-weight: 400;" aria-level="1">Then withdraw from taxable accounts,</li>
<li style="font-weight: 400;" aria-level="1">Leave tax-exempt funds for last.&nbsp;</li>
</ul>
This method prioritizes passing your estate to your heirs and may be a good strategy if you expect a higher tax rate in the future.
<h2>Taxes from Inherited Accounts</h2>
Are you planning an inheritance from a loved one will add cushion to your early retirement? Although that might be true, there&rsquo;s still taxes and rules to consider if this inheritance might be &ldquo;worth&rdquo; it. Typically, any inherited accounts are still subject to RMDs and must be distributed within a 10-year period. These inherited accounts, outside of Roths, count as taxable income and can bump you into a new tax bracket. And depending on where you live, you may incur state taxes too. If you don&rsquo;t want to deal with the taxes and maybe responsibilities of real property or creditors, you have an option to disclaim an inheritance. To understand all the tax liabilities and rules that come with an inheritance, go to our course &ldquo;<a href="/retirement-school/taxes-in-retirement-101" rel="follow noopener" target="_blank">Taxes in Retirement 101</a>&rdquo; to get a deeper understanding.&nbsp;
<h4>SOURCES&nbsp;</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">Washington, Katelyn, &ldquo;States That Tax Social Security Benefits.&rdquo; Kiplinger, 5 September 2023. <a href="https://www.kiplinger.com/retirement/social-security/603803/states-that-tax-social-security-benefits">https://www.kiplinger.com/retirement/social-security/603803/states-that-tax-social-security-benefits</a>. Accessed 4 December 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Retirement Topics - Exceptions to Tax on Early Distributions.&rdquo; IRS, 29 August 2023,&nbsp;<a href="https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions">https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions</a>. Accessed 30 November 2023.</li>
</ol>

Just because you&rsquo;re retiring doesn&rsquo;t mean you have to stop making money altogether. Today, there&rsquo;s a way to make money doing just about anything, which can make it that much easier to retire regardless of your age. Here are some ideas to consider if you&rsquo;re hoping to set up some income streams, no matter how small or large, to supplement your retirement income.&nbsp;
<h2>1. Get a Side Job</h2>
Working after retirement keeps your mind active and sharp, boosts your social life and provides extra income. If you left your previous employer on good terms, consider inquiring about reducing your hours to part-time. Or, try your hand at something new. You probably won&rsquo;t be the oldest person on the job. The Bureau of Labor Statistics predicts that 30% of all 65 to 74-year-olds will be working in 2026.1 Once you begin receiving Social Security benefits, make sure to check on earnings limits.&nbsp;
Something to think about: 70% of our customers plan to work part-time in retirement. See how adding part-time work can increase your Retirement Score.
<h2>2. Sell Assets</h2>
Declutter your house and pocket some cash in the process by selling your stuff at a garage sale or online through Nextdoor, Poshmark, Craig&rsquo;s List or eBay.
<h2>3. Move to a Retiree-Friendly Area</h2>
While interest rates are low and housing markets are hot, you may want to relocate to an area with a lower cost of living. Florida and Texas are two retirement-friendly states where you can get more house for the money and save on taxes, too. For example, moving from NYC to Florida can add 12 years to your Retirement Score and allow you to say goodbye to income taxes and high cost of living.&nbsp;
<h2>4. Ladder Money Markets and CDs</h2>
Staggering maturity dates for Money Market accounts or CDs (3 months, 6 months, 9 months, 12 months, etc.) makes your investments more readily available while earning higher rates of interest on longer term investments. Laddering these accounts also protects you from investing too much money at too low a rate for too long a time.2
<h2>5. Rent Part of Your Home</h2>
If you have a spare bedroom or guest house, consider renting it for extra income. Or perhaps you could rent storage space in your garage, or offer to park a boat or an RV on your property for extra cash. Just make sure to check out tax ramifications and HOA guidelines first.
<h2>6. Consider Home Equity</h2>
Your home is not only your castle; sometimes it can be your cash cow. Leverage the equity in your house. Home equity loans, reverse mortgages and even the outright sale of your home can provide the extra cash you need. Stretch those dollars even more by downsizing or moving to a retirement-friendly state where you&rsquo;ll get more house for your money.&nbsp;
<h2>7. Cut Down on Non-Essential Expenses</h2>
Once you start looking for ways to save money, you&rsquo;ll realize how much money you&rsquo;ve wasted over the years. To cut back on your budget: cancel your landline phone and use only your smartphone. Stream your favorite TV programs and say good-bye to outlandish cable TV bills. Prepare home-cooked meals instead of eating out. Become a one-car family again and save on insurance, maintenance, fuel and tires. Increase your insurance deductibles. Rent pricey yard equipment like pressure washers. Install a smart thermostat to regulate house temperature. Order 90-day prescriptions to save on drug costs.&nbsp;
<h2>8. Volunteer</h2>
You can&rsquo;t put a price on helping others&mdash;or compute the good that comes from volunteering. It boosts self-esteem, makes the world a better place and may even lead to a part-time job. Dorothy, a court-appointed special advocate (CASA) volunteer, was eventually hired by the local Boys and Girls Club. Leslie&rsquo;s job as an activities coordinator for a senior citizen&rsquo;s home was a direct result of her years volunteering at their weekly bingo games. Pay it forward and you just may get a payback, too.

<h4>SOURCES</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Labor Force Participation Rate for Workers Age 75 and Older Projected to be Over 10 Percent by 2026.&rdquo; Bureau of Labor Statistics, 29 May 2019, <a href="https://www.bls.gov/opub/ted/2019/labor-force-participation-rate-for-workers-age-75-and-older-projected-to-be-over-10-percent-by-2026.htm">https://www.bls.gov/opub/ted/2019/labor-force-participation-rate-for-workers-age-75-and-older-projected-to-be-over-10-percent-by-2026.htm</a>. Accessed 30 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">Gibbs, Karen. &ldquo;How a CD Laddering Strategy Can Elevate Your Savings.&rdquo; Life and Money by Citi,10 October 2019,&nbsp;<a href="https://www.lifeandmoney.citi.com/money/savings/cd-ladder-strategy-for-high-interest-saving">https://www.lifeandmoney.citi.com/money/savings/cd-ladder-strategy-for-high-interest-saving</a>. Accessed 30 November 2023.</li>
</ol>

Clearly, there&rsquo;s a lot to consider when it comes to retiring in your fifties. Here&rsquo;s a story of a couple who successfully left the workforce in their fifties.&nbsp;
<h2>Retirement in your 50s: A Real-life Story</h2>
Although it might seem like a farfetched concept to most, it can be do-able if you plan accordingly. Take Jim and Mary W., who did not want to wait until age 65 to retire. &ldquo;We saw a lot of adults who retired at 65 and they didn&rsquo;t get a very long retirement because they got sick,&rdquo; says Jim. So, when they reached 55, they both agreed, &ldquo;Let&rsquo;s retire.&rdquo;&nbsp;
Fortunately, they&rsquo;d worked for the same companies since their 20s, so they received good pensions as well as health coverage that included Medicare supplements when they turned 65. They had prepared well with 401(k)s, IRAs, investments and a Health Savings Account. And, they planned on taking Social Security at 62.
Jim, a &ldquo;spreadsheet guy,&rdquo; had tracked their spending for the previous 10 years and had an excellent idea of future expenses. The only major change they made was to leave the high-tax state of New York and relocate to retirement-friendly Florida which boosts their Retirement Score by 7 years and 3 months.
Their advice: &ldquo;Get out as soon as you can! &rdquo; Of course, this is only a good idea if you&rsquo;re prepared financially.&nbsp;
If you&rsquo;re like Mary and Jim and planning to relocate in retirement, find out how your Retirement Score will change by comparing zip codes with Silvur&rsquo;s Cost of Living calculator.

There&rsquo;s no universal sum of money that guarantees a comfortable retirement, especially if you&rsquo;re retiring in your 50s. But, if you want to retire successfully, there are some basic guidelines that everyone needs to follow.
<ol>
<li style="font-weight: 400;" aria-level="1">If you want to retire in your fifties, use Silvur to determine your Retirement Score.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Live lean&mdash;below your means&mdash;and invest the money you save toward your retirement.</li>
<li style="font-weight: 400;" aria-level="1">Test-drive your retirement budget for six months before you retire. Adjust it as needed.</li>
<li style="font-weight: 400;" aria-level="1">Build your passive income strategy to support your early retirement. Remember, you&rsquo;ll get penalized on early withdrawals from your retirement accounts.</li>
<li style="font-weight: 400;" aria-level="1">Set up an emergency fund with enough money to cover six months to one year of expenses.</li>
<li style="font-weight: 400;" aria-level="1">Make it a priority to pay off your mortgage before retiring. A mortgage-free house will be a gold mine when you retire. Maintain it well. If it&rsquo;s available where you live, investigate when you can apply for a freeze on property assessments.</li>
<li style="font-weight: 400;" aria-level="1">If you think you might want to live out your retirement in a different location, consider moving before retirement so it&rsquo;ll be easier to obtain a mortgage. This also allows you to ensure you like the area you&rsquo;ve chosen.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">&nbsp;Make a plan for health insurance coverage until you&rsquo;re 65. Familiarize yourself with all parts of Medicare.</li>
<li style="font-weight: 400;" aria-level="1">&nbsp;Make or update your will. Appoint a healthcare power of attorney. Draw up advance directives including a living will and organ donation specifics. Check into pre-paid funeral plans along with long-term care and life insurance.</li>
<li style="font-weight: 400;" aria-level="1">Store important papers&mdash;wills, deeds, mortgages, investments, etc. &mdash; in one safe place. Tell a trusted family member of its location.</li>
</ol>
Retiring in your fifties is possible. But if you determine you&rsquo;re not quite ready financially, it&rsquo;s best to wait. Outliving your money is the worst thing that could happen in retirement, and you don&rsquo;t want to be forced to find an income when you&rsquo;re much older and infirm. Adept planning and budgeting are crucial to an early retirement. If after taking this course you find you&rsquo;re truly in the clear, congrats! It&rsquo;s time to enjoy an early retirement.

Ready to retire in your fifties? Now it&rsquo;s time to find out how much you'd save and what your monthly expenses will look like for the next 30 to 40 years. We can&rsquo;t stress enough that expenses (especially healthcare bills) might hit you later on in life, but it&rsquo;s better to stress test all your retirement decisions through Silvur to improve your Retirement Score.&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Play out different scenarios. Unexpected events happen throughout life. See how those changes can impact your Retirement Score so you can plan accordingly.</li>
<li style="font-weight: 400;" aria-level="1">Calculate your healthcare costs into your savings. Healthcare costs vary by location. Estimate how much your Medicare plan will cost based on where you live.</li>
<li style="font-weight: 400;" aria-level="1">Move before you retire. Moving can save you money and extend your Retirement Score. But, it&rsquo;s better to do this before you retire to secure a mortgage. As you're scouting out locations, you can compare zip codes in our Cost of Living calculator to find which area will extend your savings the most.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Find the best age to elect Social Security. The age you elect is the most crucial decision because this reflects your income for the rest of your life. Project your lifespan in our Social Security calculator to see which age will give you the most monthly or lifetime benefits.&nbsp;</li>
</ul>

You’ve reached your 50s. But are you in good shape to retire? Here’s a look at how you compare to others your age, along with helpful information to help you plan an early exit from the workplace. 

This class will explore employer-sponsored retirement plans, focusing on the differences between defined contribution plans like 401(k)s and defined benefit plans like pensions. It will cover the pros and cons of each plan type and how to choose the best plan for you.

This class will explore employer-sponsored retirement plans, focusing on the differences between defined contribution plans like 401(k)s and defined benefit plans like pensions. It will cover the pros and cons of each plan type and how to choose the best plan for you.

Learn about the budgeting and spending in retirement.

Learn about what's being proposed in the 2025 presidential budget for Medicare and Social Security.

Learn about what's being proposed in the 2025 presidential budget for Medicare and Social Security.

Learn about the Mistakes Retirees Make: Starting Too Late, Overlooking Best Practices, and More.

Learn about common retirement scams&mdash;and how to avoid them

Learn about the updates taking effect in 2024 and how they may impact your Retirement Score.

Learn about the updates taking effect in 2024 and how they may impact your Retirement Score.

Learn about whether working with a financial planner or advisor is right for you.

Learn about how the Roth IRA conversion works and decide whether it&rsquo;s right for you.

This class covers everything you need to know about the potential changes to both Medicare and Social Security in President Biden&rsquo;s budget&mdash;including a detailed breakdown of these budget line items, how the changes could impact you and what to do if you&rsquo;re currently retired and receiving these benefits or nearing retirement and planning to receive them soon.

This class covers everything you need to know about the potential changes to both Medicare and Social Security in President Biden’s budget—including a detailed breakdown of these budget line items, how the changes could impact you and what to do if you’re currently retired and receiving these benefits or nearing retirement and planning to receive them soon.



Here&rsquo;s what all California teachers should know when getting ready to retire.

Here’s what all California teachers should know when getting ready to retire.


When you&rsquo;re retired, protecting the money you&rsquo;ve built up over your working years is critical. Fortunately, there are several government programs designed to help ensure that individuals have access to their cash when they need it, no matter what happens to your financial institution.

When you’re retired, protecting the money you’ve built up over your working years is critical. Fortunately, there are several government programs designed to help ensure that individuals have access to their cash when they need it, no matter what happens to your financial institution.

If you find yourself retiring sooner than expected, here&rsquo;s what you can prioritize to keep your retirement in check.

If you find yourself retiring sooner than expected, here’s what you can prioritize to keep your retirement in check.

Here&rsquo;s your resource for everything women need to know about planning for retirement and making the most of their benefits.

Here’s your resource for everything women need to know about planning for retirement and making the most of their benefits.

Deciding when to retire with your partner? Well there&rsquo;s a few factors to consider ranging from age, healthcare, Social Security, and more. Find out if you and your partner should retire together or at different times.&nbsp;

Deciding when to retire with your partner? Well there’s a few factors to consider ranging from age, healthcare, Social Security, and more. Find out if you and your partner should retire together or at different times. 

You&rsquo;ve reached your early sixties. That means you&rsquo;re definitely eligible for retirement - if you can afford it. Are you in good shape to retire? Here&rsquo;s a look at how you compare to others your age.&nbsp;

You’ve reached your early sixties. That means you’re definitely eligible for retirement - if you can afford it. Are you in good shape to retire? Here’s a look at how you compare to others your age. 

Retiring by the age of 65 requires some planning and forethought, but it's entirely possible if you make the right moves. In this course, you&rsquo;ll find all the steps you can take to retire when you're ready, as well as the apps and tools you can use to ease the transition.

Retiring by the age of 65 requires some planning and forethought, but it's entirely possible if you make the right moves. In this course, you’ll find all the steps you can take to retire when you're ready, as well as the apps and tools you can use to ease the transition.

Transitioning into retirement requires planning and preparation. However, there are some items you should prioritize before you leave the workforce. Here&rsquo;s what you should do now and what can wait until later in retirement.

Transitioning into retirement requires planning and preparation. However, there are some items you should prioritize before you leave the workforce. Here’s what you should do now and what can wait until later in retirement.

Have you ever dreamed about owning a boat or RV? To help turn that dream into reality, this class will teach you everything you need to know about budgeting, financing, insuring, and even saving money on your boat and RV.

Have you ever dreamed about owning a boat or RV? To help turn that dream into reality, this class will teach you everything you need to know about budgeting, financing, insuring, and even saving money on your boat and RV.

Even if you set up an estate plan decades ago, you might need to make updates. Here&rsquo;s what you need to know about estate planning in today&rsquo;s changing circumstances.

Even if you set up an estate plan decades ago, you might need to make updates. Here’s what you need to know about estate planning in today’s changing circumstances.

Here&rsquo;s our assumptions on how we calculate your Retirement Score. Learn more about your Retirement Score and what you can do to improve it.

Here’s our assumptions on how we calculate your Retirement Score. Learn more about your Retirement Score and what you can do to improve it. 

Make the most out of your IRA, based on your goals and retirement needs.

Make the most out of your IRA, based on your goals and retirement needs.

Learn the essentials for taking care of yourself and your family when a spouse dies. The lessons include understanding estate planning &amp; probate, managing changes to your Social Security, a checklist of people and institutions to notify, a review of your legal rights to the estate, and a guide to managing your spouse&rsquo;s retirement accounts.

Learn the essentials for taking care of yourself and your family when a spouse dies. The lessons include understanding estate planning & probate, managing changes to your Social Security, a checklist of people and institutions to notify, a review of your legal rights to the estate, and a guide to managing your spouse’s retirement accounts.

Along with retirement comes a chance to reflect on how this change will impact your financial life. Retirees who own a vehicle or property can take a look at their home and auto insurance to find savings and prepare for a prosperous retirement.

Along with retirement comes a chance to reflect on how this change will impact your financial life. Retirees who own a vehicle or property can take a look at their home and auto insurance to find savings and prepare for a prosperous retirement.

Inflation is always daunting. But that&rsquo;s even more the case when you&rsquo;re retired. Here&rsquo;s what you need to know about protecting your retirement income and dealing with inflation during retirement.

About this Class

Inflation is always daunting. But that’s even more the case when you’re retired. Here’s what you need to know about protecting your retirement income and dealing with inflation during retirement. 

When you&rsquo;re divorced, it&rsquo;s especially important to make sure that your estate plans are updated in retirement so that they reflect your wishes as they stand today, not as they were while you were married.

When you’re divorced, it’s especially important to make sure that your estate plans are updated in retirement so that they reflect your wishes as they stand today, not as they were while you were married.

Make sure you understand the importance of your estate planning documents in retirement &mdash; and keep them updated &mdash; no matter your marital or partnership status.

Make sure you understand the importance of your estate planning documents in retirement — and keep them updated — no matter your marital or partnership status.

Make sure you understand the importance of your estate planning documents in retirement &mdash; and keep them updated &mdash; no matter your marital or partnership status.

Here are the 2025 annual updates on costs and benefits coming to Social Security, Medicare, and ACA.

Here are the 2025 annual updates on costs and benefits coming to Social Security, Medicare, and ACA.

Scenario Planning Category

Retire by Age 50-59

Want to learn more? Unlock all lessons in this class now and access them forever. Your first class is always free.

Unlock this entire class for free

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