INSIGHT

How much money do I need to retire at 50? 

Michael Watson, Sergio Fernandez • December 18, 2025

Services: Wealth Management

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Stepping away from your career and retiring at 50 is an exciting goal.  

At 50, you’re in a particularly interesting position, personally, professionally, and financially. You’ve likely accumulated substantial career experience and earning power, plus you now have access to catch-up contributions that weren’t available in your 40s.  

While the average retirement age in America is 62, retiring 12 years earlier is possible with the right approach. 

The question isn’t whether early retirement is possible—it’s how you can build sufficient wealth to maintain the lifestyle you want while navigating the years before traditional retirement benefits kick in. 

How much do you need in your portfolio to retire at 50?  

When you’re planning to retire at 50, you’ll want to analyze all your goals and spending habits holistically to give yourself a better sense of what you’ll need to maintain your lifestyle. 

In terms of your portfolio needs, most people find it helpful to plan with more conservative withdrawal rates (less than 4%) since your portfolio potentially needs to last decades longer than traditional retirement planning assumes. This longer timeline may work in your favor in some ways, but it does require a different approach to the numbers. 

As you start to look at the numbers, you’ll get a better sense of what this could look like for you.  

The following table assumes a 3.5% annual withdrawal rate for a 40+ year retirement: 

Annual Expenses	Portfolio Needed (No Bridge Income)	Portfolio with $100K Bridge Income
$100,000	$2.5 million	$1.0 million
$150,000	$3.8 million	$2.5 million
$200,000	$5.0 million	$3.8 million
$300,000	$7.5 million	$6.3 million

As you can see, bridge income—supplementary income that comes from outside your investment portfolio—can make a significant difference in your requirements.  

For example, if you bring in $100,000 annually through part-time consulting, rental properties, or other sources, you can reduce the size of your portfolio by a couple of million dollars compared to complete financial independence. That’s a substantial reduction that can make early retirement much more achievable. 

Alternative ways to find your ideal retirement number 

There’s not one right way to find your magic retirement number—it’s completely custom to your lifestyle and circumstances.  

If reverse engineering through a planned withdrawal rate feels too ambiguous, you could also consider the income replacement approach. This “rule” suggests maintaining 80-90% of your pre-retirement income. If you’re currently earning $200,000 annually, you might need $160,000-180,000 in retirement income, which would require roughly $4.5-5.1 million using conservative withdrawal rates. 

You may have also heard of the salary multiple method, which recommends saving six times your annual salary by age 50. While this traditional guideline works for conventional retirement, it often falls short for early retirement scenarios. Carrying this rule out, someone earning $150,000 would target $900,000 by 50—which might be insufficient for early retirement without substantial bridge income or lifestyle adjustments. 

Here’s something encouraging: retiring at 50 versus 40 can offer some distinct advantages. Those ten additional earning years provide more time for portfolio growth and contributions. These factors can reduce the aggressive savings rates required for earlier retirement ages. 

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Tips to help you reach your retirement number 

Retiring at 50 requires intentional spending and systematic wealth building, but it doesn’t mean you have to change your lifestyle. It’s about being strategic with where your money goes and optimizing your financial plan. 

Here are some ways to start doing that.  

Take an honest look at your spending patterns (and future spending needs) 

Do you really know how much money you spend every month?  

Even the most finance-savvy people can gloss over regular spending habits, but when prepping for an early retirement, pulling out the microscope will be worthwhile.  

One way to get a true sense of your spending is to track your expenses for a few months. This way, you have the data to identify spending patterns and potential optimization opportunities.  

For example, many high earners discover that subscriptions or impulse purchases consume thousands annually without adding much to their quality of life. 

Pay particular attention to fixed expenses that will likely persist in retirement. Housing costs, insurance premiums, and recurring services often represent your largest controllable expenses.  

Debt obligations also deserve special attention—carrying mortgage or credit card debt into retirement can substantially increase your required portfolio size. 

It’s worth considering how retirement might change your spending patterns. Healthcare costs typically increase as employer-sponsored insurance ends. Housing expenses might decrease if you downsize or relocate. Transportation costs often drop significantly without daily commuting. These changes can work in your favor if you plan for them thoughtfully. 

Maximize your tax-advantaged accounts 

Every dollar you invest now will go toward your future. But it’s not just about investing; it’s ensuring you’re investing in tax-efficient accounts that will help you reach your goals.  

A good place to start is your foundation contributions to your retirement accounts: 

• 401(k): $23,500 in 2025, plus $7,500 catch-up if you’re 50+ 
• IRA: $7,000 plus $1,000 catch-up contribution 
• HSA: $4,300 individual or $8,550 family coverage with an extra $1,000 in catch-up contributions.  

Those catch-up contributions provide a crucial advantage for 50-year-old early retirees. The additional $7,500 in 401(k) contributions and $1,000 in IRA contributions can meaningfully accelerate your timeline—that’s an extra $8,500 annually in tax-advantaged savings. 

Advanced strategies might include mega backdoor Roth conversions if your employer plan allows after-tax contributions. Roth conversion ladders can also provide tax-free income during early retirement years before Social Security eligibility. 

Optimize your investment approach 

As we discussed earlier, it’s not enough to just invest; you need to have a strategy tied to those investments.  

Asset allocation becomes particularly important as you approach retirement age. You need growth to build wealth, but you also need some stability to weather market downturns during your early retirement years. Many people consider what’s called a declining equity glide path: higher stock allocations during your wealth-building phase, gradually shifting toward more conservative investments as retirement approaches. 

Tax efficiency becomes increasingly important as your portfolio grows (known as asset location). This involves placing tax-inefficient investments in retirement accounts while keeping tax-efficient index funds and municipal bonds in taxable accounts (like brokerage accounts). It’s all about balancing (and optimizing for) the different tax treatments of your investments, i.e., which are subject to ordinary income tax versus capital gains tax.  

Many early retirees also add real estate to their portfolio as it can provide strong cash flow and tax advantages, with an added bonus of additional portfolio diversification. If you own a rental property, for example, you can generate ongoing income while offering depreciation deductions. If direct property ownership doesn’t appeal to you, Real Estate Investment Trusts (REITs) provide similar exposure without property management responsibilities. 

Think strategically about debt elimination 

Debt isn’t always a bad thing. In fact, leveraging debt strategically can help you reach certain objectives.  

But carrying the wrong debt with you into retirement can take away from other financial avenues you may want to pursue.  

It all depends on the type of debt you have, interest rates, other income sources, and overall spending habits—all of which are extremely personal.  

A great example of this is paying off a mortgage before you retire at 50.  

On the one hand, entering retirement without a housing payment provides valuable cash flow flexibility and can reduce your required portfolio withdrawals.  

However, paying off low-rate mortgages might not optimize your overall wealth if investment returns exceed your borrowing costs. This is one of those decisions where your personal comfort level with debt plays a significant role. 

Consider geographic arbitrage opportunities 

One benefit of retirement is that you likely aren’t bound to one location due to your career. This makes relocation, especially relocation to lower cost-of-living areas, more feasible.  

The difference between retiring in San Francisco versus Austin, or Manhattan versus Nashville, can represent hundreds of thousands in required savings. Geographic arbitrage isn’t just about lower costs and potential tax savings—it’s about accessing different lifestyle opportunities during your retirement years. Maybe you want to live near the beach, in the mountains, or in a vibrant smaller city with great cultural amenities. 

In general, moving from high-cost areas to regions with lower living expenses can reduce your required portfolio size. You’ll, of course, want to factor in family, friends, healthcare, and lifestyle routine considerations into any move.  

Plan for your health 

If you want to retire early at 50, that leaves 12 years before you’d be eligible for Social Security and an even longer 15-year wait for Medicare.  

It’s important to create an income plan that accounts for these gaps, notably in your health. 

One option is COBRA. This law lets you continue with your existing healthcare coverage for up to 18 months after a “qualifying event,” which in this case would be retirement. While your coverage will be seamless, COBRA typically costs quite a bit more than employee premiums. 

After COBRA expires, the private insurance via the ACA marketplace plans become your primary option for securing healthcare. When you get to this point, shop around as premium costs can take big swings depending on your location and income level. Plus, early retirees with substantial portfolios may not qualify for premium subsidies, making healthcare a large retirement expense to prepare for. 

This is where Health Savings Accounts (HSAs) become really valuable. The triple tax advantages—deductible contributions, tax-free growth, and tax-free qualified withdrawals—make HSAs powerful retirement funding vehicles that can extend well beyond their healthcare purpose. 

Create your personalized retirement plan 

How much money you need to retire at 50 depends on your lifestyle, spending goals, debts, health, and investment philosophy.  

There’s no one formula that will tell you when you’ve reached your magic retirement number—building a retirement income plan is all about creating a customized approach that aligns with your values and the retirement lifestyle you actually want. 

If you’re ready to explore what retiring at 50 could look like for your specific circumstances, contact BPM’s wealth management team to develop comprehensive strategies tailored to your income, spending patterns, and retirement lifestyle goals. 

This material is for informational purposes only and is not intended to provide specific advice or recommendations for any individual. This information is not intended for use as tax advice. 
The examples given are hypothetical and are for illustrative purposes only. Actual results may vary from those illustrated.  

Securities offered through Valmark Securities, Inc. Member FINRA, SIPC | Investment Advisory services offered through BPM Wealth Advisors, LLC and/or Valmark Advisers, Inc. each an SEC Registered Investment Advisor | BPM LLP and BPM Wealth Advisors, LLC are entities separate from Valmark Securities, Inc. and Valmark Advisers, Inc.