Here’s why you should seriously think about retiring at 55, even if you’ve planned for 62 (you can actually save money)

The average retirement age in the U.S. is 62, according to the 2024 MassMutual Retirement Happiness Study. (1)

That’s not a coincidence, but a side effect of bureaucracy. Sixty-two happens to be the earliest age a person is eligible to claim Social Security benefits.

Delaying retirement would maximize the size of these benefit checks, although it seems most Americans are keen to quit work as soon as they qualify to receive their first payout.

Most of the time, people are urged to hold off for as long as possible. However, there’s also an argument that quitting earlier could be the best choice for many workers.

Retiring at age 55 could have a positive impact on your quality of life and potentially even save you money. Here’s why.

Early retirement is a dream scenario for many Americans. Nearly one in five (18%) of adults surveyed by YouGov in 2024 said they would like to retire at or before they turn 55. (2)

It’s understandable why people would want to quit work in their mid-50s. At this age, you’re likely to be an empty-nester, perhaps with a relatively small or fully paid-off mortgage.

You also probably have much of the physical and mental energy needed to enjoy your retirement fully. Climbing Machu Picchu is a lot more fun in your 50s rather than your 60s.

There’s also data supporting the case for an early retirement. Life expectancy in the U.S. is 78.4 years, according to the Centers for Disease Control and Prevention (3), but the average healthy lifespan in the country is just 63.9 years, according to the World Health Organization. (4) Retiring at 55 instead of 62 gives you seven additional years of good health to enjoy.

Why waste those seven additional years working when you could spend them doing something you love?

Unfortunately, many Americans delay retirement not because they want to but because they have to. Anxiety about savings and income in retirement keeps many people in the workforce longer than they’d like.

But quitting work at 55 could potentially save you money if you plan appropriately.

Read More: This is the quiet portfolio shift many wealthy investors are making in 2026. Should you consider it too?

Although it’s difficult to quantify precisely, it’s likely that avoiding seven extra years of work-related stress could reduce your medical expenses later in life.

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However, that isn’t the only financial benefit of early retirement. For many Americans, their 50s are often the peak of their career and earnings potential, and, consequently, when they pay the most taxes.

Quitting work during this period should place you in a range of income taxed at a lower rate and allow you to pull off sophisticated tax maneuvers more efficiently. For instance, moving assets from a 401(k) plan or IRA to a Roth account, also known as a Roth conversion, is more cost-effective if you’re in a lower tax bracket.

You could also simply draw down pre-tax savings from a 401(k) or IRA at lower marginal rates before collecting Social Security, or required minimum distributions (RMDs) start at 73. That could save you a lot of money in the long term.

If you have assets in a taxable brokerage account, retiring at 55 could allow you to tap into those assets as well. For 2025, the capital gains tax rate is 0% on up to $48,350 of taxable income for single filers, or $96,700 for married couples filing jointly. (5)

In addition, retiring at 55 gives you the flexibility to make major 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 all help you save money.

Avoiding seven years of mortgage payments or home maintenance costs could be a game-changer. However, these major lifestyle changes might not all be possible if you still need to commute to work until the age of 62.

Although there are many financial and psychological benefits to retiring at 55, there is one major caveat to consider: the size of your nest egg. If you retire with too little in savings and investments, there is a chance you could outlive your assets, which is every retiree’s worst nightmare.

Before you pull the plug on your career, reach out to a professional financial advisor to help you create and stress-test your early retirement plan.

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

MassMutual (1); YouGov (2); CDC (3); World Health Organization (WHO) (4); IRS (5).

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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