How Much Do I Need to Retire at 55?
Calculate exactly how much you need to leave the workforce at 55 and enjoy decades of freedom. Plus, strategies for healthcare, taxes, and withdrawal rates.
Calculate Your NumberFree. No signup required.
The Quick Answer
To retire at 55, most people need between $1.5 million and $2.5 million. The exact amount depends on your annual spending, healthcare needs, and whether you have other income sources.
Modest lifestyle
$1.5M
$50k/year spending
See detailed analysis →
Comfortable lifestyle
$2M
$70k/year spending
See detailed analysis →
Generous lifestyle
$2.5M+
$90k+/year spending
See detailed analysis →
Why the lower withdrawal rate?
Retiring at 55 means 40+ years of withdrawals. The standard 4% rule was designed for 30-year retirements. For safety, we recommend 3.5% for a 55-year-old retiree. At 3.5%, $2M provides $70,000/year.
The Unique Challenges of Retiring at 55
Retiring at 55 is different from retiring at 65. Here is what you need to plan for:
Healthcare Gap (55-65)
No Medicare until 65. Budget $15,000-25,000/year for ACA or COBRA. See your options.
No Social Security Yet
Earliest SS is 62, optimal is 67-70. Your portfolio must cover all expenses for 7-15 years.
Longer Retirement
40+ year retirement requires lower withdrawal rates (3-3.5%) for safety.
Account Access
Penalty-free 401(k) access at 55 (Rule of 55), but IRA access requires SEPP/72(t) until 59½.
How Much You Need by Spending Level
Using a 3.5% withdrawal rate (recommended for 40-year retirements):
| Annual Spending | Amount Needed (3.5%) | Monthly Budget | Lifestyle |
|---|---|---|---|
| $40,000 | $1,143,000 | $3,333 | Lean, low-cost area |
| $50,000 | $1,429,000 | $4,167 | Modest, paid-off home |
| $60,000 | $1,714,000 | $5,000 | Comfortable |
| $70,000 | $2,000,000 | $5,833 | Comfortable+ |
| $80,000 | $2,286,000 | $6,667 | Upper middle class |
| $100,000 | $2,857,000 | $8,333 | Fat FIRE |
Note: These numbers include healthcare costs. After 65, Medicare reduces expenses significantly.
Healthcare: The 55-65 Gap
Healthcare is the #1 concern for those retiring before Medicare age. Here is what to expect:
ESTIMATED HEALTHCARE COSTS (AGE 55-65)
Single person
$8,000 - $15,000/year
Couple
$15,000 - $25,000/year
Your options:
ACA Marketplace (Obamacare)
Subsidies available based on income. Keep income below 400% of poverty line for best rates. A couple at $70k income might pay $300-600/month after subsidies.
COBRA (from previous employer)
Expensive (full premium + 2%) but good for first 18 months while you plan. Typically $1,500-2,500/month for family coverage.
Part-time job with benefits
Starbucks, Costco, REI offer benefits at 20+ hours/week. This is the "Barista FIRE" approach.
Health share ministries
Not insurance, but can help with major expenses. Lower cost ($300-500/month) but less comprehensive.
Consider Barista FIRE
Part-time work can solve the healthcare gap while you transition.
Barista FIRE CalculatorHow to Access Your Money at 55
Retirement accounts have age restrictions, but there are legal ways to access funds before 59½:
1. Rule of 55 (401k only)
If you leave your employer at age 55 or older, you can access that employer's 401(k) penalty-free. You do not need to wait until 59½. This only applies to the 401(k) of the employer you're leaving - not previous 401(k)s or IRAs.
2. Roth IRA Contributions
You can withdraw your Roth IRA contributions (not earnings) at any age, penalty-free. If you've contributed $100k over the years, you can access that $100k anytime. The earnings must wait until 59½.
3. SEPP/72(t) Distributions
Take substantially equal periodic payments from any IRA. You must continue for 5 years or until 59½, whichever is longer. Complex rules - consult a tax professional.
4. Taxable Brokerage Accounts
No restrictions on when you can access money in regular brokerage accounts. You'll pay capital gains tax on growth, but no early withdrawal penalties.
Pro tip: The Roth Ladder
Convert traditional IRA/401(k) to Roth each year. After 5 years, you can withdraw the converted amount penalty-free. Start 5 years before you retire at 55 (at age 50) to build accessible funds.
Step-by-Step: Planning to Retire at 55
Calculate your annual spending
Track every expense for 3-6 months. Include healthcare ($15-20k/year for a couple before Medicare). This is your baseline number.
Multiply by 28-30
For a 40-year retirement, use 3.3-3.5% withdrawal rate. $60k spending × 28.5 = $1.71 million. Add cushion for uncertainty.
Plan your account access
Ensure enough in accessible accounts (taxable, Roth contributions, Rule of 55 eligible 401k) to cover years 55-59½.
Solve healthcare
Research ACA marketplace costs in your state. Consider Barista FIRE or COBRA for the gap years.
Decide on Social Security strategy
Plan whether to claim at 62, 67, or 70. Later = higher payments. Your savings must cover the gap until you claim.
Build your withdrawal strategy
Decide tax-efficient withdrawal order. Consider Roth conversions in low-income years (age 55-62) when you're in lower tax brackets.
Calculate your exact number
Enter your details and see your personalized path to retiring at 55.
Use FIRE CalculatorCan I Retire at 55 with...
Explore detailed analysis for specific savings amounts. Each page includes withdrawal rates, healthcare costs, scenario comparisons, and personalized action steps.
Frequently Asked Questions
How much do I need to retire at 55?
Most people need $1.5-2.5 million to retire at 55, depending on spending. At 3.5% withdrawal (recommended for 40-year retirement), $2M provides $70,000/year. Add healthcare costs of $15-25k/year until Medicare at 65.
Can I retire at 55 with $1 million?
It is possible but challenging. $1M at 3.5% provides only $35,000/year, and you must cover healthcare until Medicare (65). This works if you have low expenses, a paid-off home, and plan for part-time income or Barista FIRE.
Can I retire at 55 with $2 million?
Yes, for most people. $2M at 3.5% provides $70,000/year. Even with $20k for healthcare, you have $50k for living expenses. This is comfortable in moderate-cost areas, especially with a paid-off home.
What are the biggest challenges of retiring at 55?
The three biggest challenges are: 1) Healthcare costs until Medicare at 65 ($15-25k/year), 2) No Social Security until 62 at earliest, and 3) A longer retirement requiring more conservative withdrawal rates (3-3.5% vs 4%).
When can I access retirement accounts if I retire at 55?
If you leave your job at 55+, you can access your 401(k) penalty-free (Rule of 55). For IRAs, you can use SEPP/72(t) distributions. Roth contributions can be withdrawn anytime. Taxable accounts have no restrictions.
Should I delay Social Security if I retire at 55?
Often yes. If you have enough savings, delaying Social Security until 67 or 70 increases your lifetime benefits significantly. Each year past 62 increases benefits by about 8%. Your savings can bridge the gap.
Is $500,000 enough to retire at 55?
For most people, $500k alone is not enough to retire at 55. At 3.5% withdrawal, $500k provides only $17,500/year. However, $500k could work for Barista FIRE (with part-time income) or if you have a pension, rental income, or extremely low expenses in a low-cost area.
How much should I have saved at 55 to retire?
Plan for 25-30x your annual expenses. For $60,000/year spending including healthcare, you need $1.5-1.8 million. For $80,000/year, plan for $2-2.4 million. Use a lower withdrawal rate (3.5%) for the longer 40-year retirement horizon.
Ready to plan your escape?
Use our calculators to see exactly when you can leave the 9-5 behind.
Not financial advice. This calculator is for educational purposes only and does not constitute financial, tax, or investment advice. Results are estimates based on the inputs you provide and historical data. Consult a qualified financial advisor for personalized guidance. Read our editorial guidelines.