How Close Is Too Close to Retiring Early? What These Real Families Found
Retirement planning often looks straightforward on paper. Hit a number, follow a withdrawal rule, and everything should work out. In reality, the decision to retire especially early is rarely that simple.
Several real-world scenarios highlight just how close “ready” and “not ready” can be, even for people with substantial savings.
When the numbers say “yes,” but doubts remain
One couple in their late 40s and early 50s has built more than $1.5 million in retirement savings, earns a high income, and owns a home with a manageable mortgage. On long-term projections, they appear well-positioned to retire comfortably by their late 60s.
But their question isn’t about traditional retirement. It’s about how early they can stop working and whether doing so introduces risks that projections don’t fully capture.
Inflation, lifestyle expectations, and sequence-of-returns risk all become more pronounced the earlier retirement begins. Even a modest withdrawal rate can feel uncomfortable when the timeline stretches decades longer than planned.
When lifestyle goals complicate the math
Another couple, already financially independent by most standards, faces a different challenge. With several million dollars saved and significant real estate holdings, their concern isn’t if they can retire it’s how lifestyle upgrades affect sustainability.
Purchasing an expensive second home, even with a large down payment, changes cash flow, tax exposure, and flexibility. The numbers may still work, but the margin for error shrinks.
In these cases, tax strategy becomes just as important as investment returns. Roth conversions, timing income, and managing real estate cash flow can make the difference between confidence and constant second-guessing.
When health accelerates the decision
For some, retirement timing isn’t a financial preference it’s a health-driven decision.
One individual in their mid-50s faces mounting health concerns that make continued full-time work less appealing. With solid savings, home equity, and a clear plan to downsize, early retirement appears achievable. Still, the withdrawal rate required to bridge the gap to Social Security introduces understandable anxiety.
Here, flexibility matters more than perfection. Reducing expenses, keeping low-interest debt for liquidity, or supplementing income with part-time work can dramatically improve sustainability without abandoning the goal of early retirement.
The hidden risks early retirees often overlook
Across all scenarios, several themes repeat.
First, early retirement magnifies uncertainty. Market downturns, inflation spikes, and unexpected expenses have more time to compound.
Second, taxes matter more than most people expect. Withdrawal strategy, Roth balances, and timing conversions can significantly alter long-term outcomes.
Third, family obligations don’t disappear. Adult children, healthcare needs, or caregiving responsibilities can change financial assumptions quickly.
Why “almost ready” is often the hardest place to be
Being close to retirement is psychologically harder than being far away. The finish line feels within reach, but the fear of making an irreversible mistake looms large.
For many households, the solution isn’t a dramatic change. It’s small adjustments delaying retirement by a year or two, reducing spending slightly, or maintaining optional income streams.
Early retirement isn’t a yes-or-no decision. It’s a spectrum, and comfort often comes from flexibility rather than hitting a perfect number.
Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.
IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.
• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
