If You've Hit This Savings Milestone By 50, You Might Be Ready To Retire Early

The results of a study published by Northwestern Mutual in April 2025 suggest an interesting change that bucks a multi-year trend. The financial services firm found that the "expected amount needed to retire comfortably" by American workers fell, and by a drastic figure. 2024's estimate stood at $1.46 million, while participants in 2025 yielded a $1.26 million price tag on a comfortable retirement lifestyle. With this figure in mind, savers can begin to wrap their heads around what their retirement might look like, and more importantly, how it stacks up against expectations and projections.

One question that bubbles up to the surface has more to do with timing. Suppose your savings have already hit or surpassed $1.26 million when you're 50. Your next steps can make or break a long and fulfilling retirement. Many diligent savers want to create the conditions for themselves that will enable an early exit from the workforce, but there are important steps to take to bridge the income gap by choosing this path. Notably, a higher savings volume is required for a safe early retirement. Not only will your retirement last longer, demanding additional capital as a result, but you also won't have access to tax-advantaged IRA or 401(k) drawdown tools or your Social Security checks. Even so, if you're at or near this figure by 50, you're ahead of the curve and might be able to start winding down the clock on your working years.

At 50, savers gain access to expanded contribution caps for their retirement accounts. The "catch-up contribution" limit allows older Americans to set aside $1,000 in 2025 (and $1,100 in '26). For a 401(k), the cap stands at $8,000 in 2026. These additions were made a permanent feature of retirement savings within the Pension Protection Act of 2006. Retiring at 50 might be in the cards if you find yourself significantly ahead of your savings goals, but spending a few additional years saving — especially with the help of catch-up contribution allowances — can magnify your capital, giving you exponentially more value to work with as you plot out your retirement budget and spending priorities.

For a 60-year-old retiree with $1.26 million in the bank, a conservative 4% annual drawdown (the starting point for a retiree following the 4% rule for retirement savings) would yield $4,200 per month in available cash. This approach limits the risk of becoming insolvent, but it can be difficult to maintain that confidence in your nest egg if you decide to retire a decade or more ahead of schedule. Instead, considering that compounding interest tends to double your investment every seven years, it's entirely possible that hitting this savings target at 50 can give you well over $8,000 as a sustainable monthly drawdown figure without having to work into your 60s. You won't just live comfortably in retirement; you'll flourish as an affluent retiree.