7 Signs You’re Ready to Retire Early

If you’re thinking of retiring early, how much you have saved is important, but it’s not the only thing you need to worry about.Many people who retire early discover that they weren’t quite ready for such a major change.

As many as 54% of young or early retirees in Generation X report that they are considering “unretiring.” Their reasons for returning to work are both economic and emotional, such as wanting the intellectual challenge of work and needing more needing more financial options.

Before you retire early, consider whether you meet these financial milestones. If so, you may be ready to leave the workforce.

1. You Are Debt-Free

Carrying a debt into retirement can be a significant drain on your finances, warns Jamie Kertis, a certified plan fiduciary advisor (CPFA)and financial advisor at EverThrive Financial Group. If you are already debt-free, you might be ready to live on a fixed income. But if you aren’t, focus on paying off your debt before you retire early.

“Make a plan to pay down high-interest revolving debt, like credit cards, first, and then focus on fixed-interest rate loans,” Kertis said. “It can also be a good strategy to pay down unsecured loans first.”

2. You Have Multiple Sources of Income

If you plan to retire early, you don’t necessarily want to withdraw money from your 401(k) or individual retirement account (IRA)s, as tapping these accounts before age 59½ can result in hefty penalties and fees for early withdrawals.Additionally, retiring early means that you may not be able to rely on Social Security. The earliest that you can start collecting is age 62.

Therefore, it’s important to consider what income streams you do have. Having variety of income streams will protect you from losses during a long retirement. These are some income streams that can help you diversify:

3. You Have Strong Retirement Savings

In addition to multiple income streams, you should only retire early if you already have robust retirement savings in tax-advantaged accounts. Even if you aren’t yet withdrawing that money, you should contribute as much as possible before you stop working so that it can continue to grow until you can withdraw it without penalty.

Kertis recommends maximizing your contributions before you stop working. In 2025, you can contribute $7,000 to an IRA and $23,500 to a 401(k). If you’re age 50 or older, you can contribute an additional $1,000 to your IRA and $7,500 to a 401(k) (or $11,250 for ages 60–63).

4. You Have a Plan and Savings for Healthcare

Unless you have a disabling chronic condition, you won’t be able to start Medicare coverage until you are 65 years old. Before you retire early, you need a plan for how you will manage your medical care. “Healthcare can be a significant drain on any fixed-income living situation,” said Kertis.

If you have savings for healthcare expenses and a plan for accessing affordable insurance coverage, you might be ready to retire early.

A 2025 study from Fidelity found that the average 65-year-old will spend about $172,500 on healthcare in retirement. If you are retiring early, you need the savings to cover even more than that.

If you’ve been stashing money in a Health Savings Account (HSA) while you work, you can use that money tax-free for qualified healthcare expenses in retirement.

Otherwise, you will need enough in savings to cover both out-of-pocket expenses and any health insurance premiums. For health insurance, you may consider purchasing a plan off the Health Insurance Marketplace, getting coverage through a working spouse’s health plan, or enrolling in COBRA—though coverage is typically only temporary with COBRA.

5. You Have Strong Social Connections

“It is essential to consider not only the financial side of retirement, but also the emotional and practical aspects,” said Kertis. Without the social interaction that comes with a job, many retirees find themselves feeling isolated, especially if they retire early and most of their peers are still working.

Having strong social connections outside of work is a sign that you might be ready to retire early. You can build these connections through a club, volunteer work, your neighborhood, or even religious communities.

6. You Know How to Create Daily Structure

If you’re used to structuring your life around your work schedule, then being suddenly adrift in retirement can leave you feeling unchallenged and bored. Before you retire early, you should know how to motivate yourself to exercise, socialize, and maintain hobbies without the daily framework that a job creates.

If you aren’t good at doing that on your own, consider getting a part-time job to impose a bit of structure on your life.

“Part-time work can be a fulfilling part of planning for retirement if you consider what you want to do with your time,” said Kertis. She suggests looking for work that connects to your interests, such as working at a pet store if you love animals.

You can also impose some structure by signing up for classes, volunteering, or making travel plans with loved ones and friends.

7. You Have a Sense of Purpose

More than 40% of early retirees considering a return to work found that they missed the challenge and stimulation of work in their daily lives. Before you retire early, know how you’re going to create that challenge for yourself outside of the workplace.

Will you volunteer? Learn a language or art form you’ve always wanted to work on? Travel? Care for your grandkids? Whatever you choose, it should be something that excites you and gives you a sense of purpose. Otherwise, you might find yourself thinking about “unretirement,” too.

The Bottom Line

Many people who retire early discover they weren’t ready for that big change, for both financial and emotional reasons. If you want to retire early, make sure you have a financial plan that includes multiple income sources to use before you can take withdrawals and a plan for healthcare, as you likely won’t qualify for Medicare yet.

You should also have a plan for how you’ll structure your daily routine. Consider things like part-time work, volunteering, travel, caring for grandkids, and other activities that will keep your social connections strong and give you a sense of purpose once you are no longer working full-time.