Yes, You Can Retire at 50 - Learn How

A little luck and a lot of savings help.

birthday cake for age 50
Here's how to plan for an age 50 retirement. JupiterImages/GettyImages

If you want to retire at 50 you have a few choices; start saving as much as you can as fast as you can, get lucky, or make something profitable (which also involves a component of getting lucky). Below are examples of people who have been successful in each of these three ways. 

1. Save as Much as You Can, as Fast as You Can

On his website Early Retirement Extreme, Jacob describes how he achieved financial independence within five years by taking some extreme measures.

He saved about 75% of his income by choosing a lifestyle that involved only spending money on the bare necessities. The bottom line is if you are willing to do what few other people are willing to do for a few years (save a whopping 75% of what you make), you can achieve something that few others will achieve (financial independence at a young age).

In addition to saving a lot of money, there are a few other practical considerations to keep in mind if you want to retire at 50. For example, health insurance coverage can be quite costly before you reach Medicare age. Have you budgeted for this? And have you thought about what you will do with your time and if your desired hobbies will mean you will incur extra expenses? Some people have a retirement lifestyle that costs more, while others want to spend time at home cooking and gardening, which may reduce expenses. You also must realize you may live until 90, which means your savings and investments may need to cover forty years or more.

To make sure your money lasts, you’ll need to avoid early retirement mistakes such as spending too much too soon or relying on unrealistic rates of return or other factors that are not within your control. You can't count on a good stock market to make an early retirement work out for you.

2. Get Lucky

Some people are able to retire at 50 because they get lucky - at least that is how it looks from the outside. Perhaps they win the lottery or receive a large inheritance. It takes more than luck, however. Remember when you were little and you thought “if only I had a million dollars, I’d be set.” It doesn’t work that way. Even if you get lucky, you have to be smart and create a plan. Plenty of people come into money, and a few years later find they are broke again. If you do get lucky, create an investment plan to help you establish well-defined goals and objectives.

You’ll also want to learn as much as possible about investing. You don’t have to become an expert, but if you gain an understanding of investing basics, you are less likely to fall for a scam. There is always going to be someone out there trying to part you from your money. A bit of healthy skepticism is good, and educating yourself is even better.

Overall, if I was serious about retiring at 50, I wouldn’t count on luck. I’d either save as much as possible as fast as possible as described above, or I’d focus on ways to use my smarts to create intellectual property, as described below.

3. Make Something Profitable

You may be able to invent something, grow and sell a business, or create intellectual property such as a series of books, instruction manuals, or patents.

For this to work, it takes a combination of skill, smarts, business prowess, and luck. If you have a story to tell, an unusual or exceptional talent, or specialized knowledge in your field, look into ways to create regular revenue from this expertise or skill. Think about it, Justin Bieber did it. Why not you?

Check out the different types of intellectual property to give you an idea of what types of work you might be able to copyright, trademark or patent. You can also brush up on ways to sell, market, and license various products you might create.

Regardless of what approach you take, if you want to retire at 50 it is going to take discipline and a complete commitment to the goal.

What Does Retirement at 50 Really Mean to You?

For some people retiring means leaving their current employer, but it does not necessarily mean not working anymore.

Maybe you want to retire because you are in a career that isn't a good fit, or you have a boss you can't stand. A different career or new environment might completely change your perspective. Or perhaps you are entrepreneurial. If you had your own business at 50 would that accomplish your goal?

If what you really want is independence from a boss or employer, you might look into starting a consulting business or begin research on different small businesses you could start. This takes planning, time, and sometimes it takes capital to invest, but it may give you the independence you are looking for while still enabling you to earn income.