According to the 2024 MassMutual Retirement Happiness Study, the average retirement age in the United States is 62 years old. (1)
This is no coincidence but a side effect of bureaucracy. Sixty-two years old happens to be the earliest age a person becomes eligible to receive Social Security benefits.
Delaying retirement would maximize the size of those benefit checks, although most Americans seem keen to quit their jobs as soon as they become eligible for their first benefit.
Most of the time, people are urged to postpone if possible. However, there is also a view that for many workers, quitting their job early may be the best option.
Retiring at age 55 may have a positive impact on your quality of life and may even save you money. Here’s why.
Early retirement is a dream for many Americans. Nearly one in five adults (18%) say they want to retire at or before age 55, according to a 2024 YouGov survey. (2)
It’s understandable that people want to quit their jobs in their 50s. At this age, you are most likely an empty nester and may have a relatively small or fully paid off mortgage.
You may also have a lot of the physical and mental energy you need to make the most of your retirement. Climbing Machu Picchu is much more fun in your 50s than in your 60s.
There are also data supporting the case for early retirement. According to the Centers for Disease Control and Prevention, life expectancy in the United States is 78.4 years(3), but according to the World Health Organization, the country’s average healthy lifespan is only 63.9 years. (4) Retiring at 55 instead of 62 can give you seven more years of good health.
Why waste seven years working when you can spend those seven years doing something you love?
Unfortunately, many Americans are delaying retirement not because they want to, but because they have to. Anxiety about retirement savings and income has many people working longer than they expected.
But if you plan well, quitting your job at 55 may save you money.
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Although it’s difficult to quantify precisely, avoiding seven additional years of work stress may reduce your medical expenses later on.
However, that’s not the only financial benefit of retiring early. For many Americans, their 50s are often the peak of their careers and earning potential, and therefore the time when they pay the most taxes.
Quitting your job during this period should put you in a range of lower-tax income brackets and allow you to complete complex tax strategies more efficiently. For example, if you are in a lower tax bracket, it can be more cost-effective to transfer assets from a 401(k) plan or IRA to a Roth account (also called a Roth conversion).
You can also withdraw pre-tax savings from a 401(k) or IRA at a lower marginal rate before taking Social Security, or take minimum distributions (RMDs) starting at 73. This can save you a lot of money in the long run.
If you have assets in a taxable brokerage account, retiring at age 55 also allows you to tap into those assets. In 2025, the capital gains tax rate is 0% on taxable income of up to $48,350 for single filers and 0% on taxable income of $96,700 for married couples filing jointly. (5)
Additionally, retiring at age 55 gives you the flexibility to make significant lifestyle changes that can save you money in the long run. Downsizing from a family-sized home to an apartment, renting, or even moving to another city with a lower cost of living can help you save money.
Avoiding seven years of mortgage payments or home maintenance costs can be a game-changer. However, if you still have to commute to work until age 62, these major lifestyle changes may not be entirely possible.
While there are many financial and psychological benefits to retiring at 55, there’s an important caveat to consider: the size of your savings. If you save and invest too little in retirement, you risk outliving your assets, which is every retiree’s worst nightmare.
Before you end your career, contact a professional financial advisor to help you develop and stress-test your early retirement plan.
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MassMutual (1); YouGov (2); Centers for Disease Control and Prevention (3); World Health Organization (WHO) (4); Internal Revenue Service (5).
This article provides information only and should not be considered advice. It is provided without any warranty of any kind.
