What If I Retire Early? How to Test Different Retirement Ages

Mark Briggs
October 2026

What if you could retire five years earlier than planned?

For many people, that is one of the most exciting questions in retirement planning. But it is also one of the most important questions to test carefully.

Retiring earlier does not simply mean stopping work sooner. It can change almost every part of your retirement plan.

You may have fewer years to save. Your investments may have less time to grow. Your portfolio may need to provide withdrawals for more years. Pension income may begin at a different age. Government benefits may change depending on when you claim them. Taxes can change as your income changes.

The good news is that you do not have to guess what an earlier retirement might look like.

You can model it, test it and compare it with other retirement ages.

That is the real value of an early retirement scenario.

What Does Retiring Early Actually Mean?

There is no universal age that defines early retirement.

For one person, retiring at 55 may be early. For another, it may be the planned retirement age. Someone else may consider leaving work at 62 to be early.

The important question is not whether your retirement age qualifies as "early."

The important question is: What happens to your financial plan if you move your retirement date?

For example, suppose your original plan is to retire at 65. You could test what happens if you instead retire at:

• 55
• 57
• 60
• 62
• 65
• 67

Comparing these scenarios can reveal how much flexibility you actually have.

Retiring Earlier Creates a Double Effect

One of the biggest misunderstandings about early retirement is that it only means having fewer years of employment income.

It can have a double effect.

First, you may stop earning and contributing to your investments earlier.

Second, you may start withdrawing from your investments earlier.

That means your portfolio can lose some of its accumulation period while simultaneously gaining additional years of withdrawals.

Consider a simplified example.

Suppose you have $1 million invested at age 55 and are deciding whether to retire at 55 or continue working until 60.

If you continue working, you might add more savings and allow the existing portfolio to continue growing. You may also reduce the number of years that your investments need to support your retirement.

Retiring at 55 could still be completely reasonable. But the question should be tested rather than assumed.

Start With Your Retirement Age

Retirement age is one of the most powerful assumptions in a retirement plan.

A small change can affect:

• Employment income
• Annual savings
• Investment growth before retirement
• Portfolio withdrawals
• Years of retirement
• Pension income
• Government benefits
• Taxable income
• Required investment income
• Financial flexibility

This is why changing retirement age in a retirement calculator should ideally cause the rest of the financial model to be recalculated rather than simply changing one date on a chart.

Our earlier article, Can I Retire Early? How to Know If You Can Afford Early Retirement , explains the broader question of whether early retirement is affordable.

What Happens to Your Savings If You Retire Earlier?

Retiring earlier can reduce the number of years you contribute to your retirement accounts.

Imagine that you currently save $20,000 per year and plan to work until 65. If you retire at 60, you may give up five years of contributions.

You also give up the potential investment growth on those contributions.

This does not mean that early retirement is a bad decision. It means that the cost of retiring earlier should be included in the calculation.

The effect can be particularly significant when someone is still saving aggressively in the years immediately before retirement.

What Happens to Investment Growth?

Investment growth is another reason retirement age matters.

Money that remains invested for another five or ten years has more time to potentially compound.

If you retire earlier, some of that future growth may never occur because you begin withdrawing from your investments instead.

On the other hand, retiring later does not guarantee higher investment returns. Markets can rise or fall, and actual results will vary.

The point is to model the difference using reasonable assumptions and then test how sensitive the plan is to those assumptions.

Retirementize Lets You Test the Age of Individual Accounts

Retirement planning becomes more interesting when you stop treating all retirement savings as one giant account.

Different accounts can have different characteristics and different planned withdrawal ages.

For example, you might have a workplace retirement account, an IRA or Roth IRA in the United States, or an RRSP or TFSA in Canada, along with other investment or savings accounts.

Rather than assuming every account starts providing income at the same time, Retirementize provides individual account age controls.

This allows you to model a retirement strategy where different accounts begin being used at different ages.

That can be especially useful when testing early retirement.

For example, suppose you want to retire at 55 but plan to rely initially on one investment account while allowing another account to remain invested for several additional years.

You can test those different timing assumptions instead of treating your entire investment portfolio as a single pool of money that must be withdrawn immediately.

The result can be a much more realistic comparison of different retirement ages and withdrawal strategies.

Pensions Can Have Their Own Retirement Age

Pensions are another important reason that retirement age should not be modeled as a single number.

A person may stop working at 57 but choose to begin a pension later. Another person may begin pension income immediately after leaving work.

Retirementize provides individual pension age controls, allowing pension income to be modeled at the age that applies to that pension.

This matters because changing your retirement age does not necessarily mean every source of retirement income starts at exactly the same time.

Consider a simplified example:

• Retire from employment at age 57.
• Use investment savings to help fund the first few years.
• Begin a pension at age 60.
• Begin government benefits at a later age.
• Use other investment accounts according to the overall withdrawal strategy.

That is a very different retirement cash-flow pattern from simply saying, "I retire at 57, so all retirement income begins at 57."

When evaluating early retirement, these timing differences can materially affect the amount your portfolio needs to provide.

Government Benefits Can Change the Early Retirement Equation

Government retirement benefits can also be an important part of an early retirement plan.

Depending on where you live, this can include programs such as CPP and OAS in Canada or Social Security in the United States.

The age at which benefits begin can affect the amount of income your portfolio needs to provide during the years before those benefits start.

This creates what is sometimes called a bridge period.

For example, someone might retire at 58 but plan for government benefits to begin later. The investment portfolio may need to provide more income during the early retirement years than it does after those benefits begin.

That is one reason an early retirement plan should model the timing of different income sources rather than simply adding up their eventual annual amounts.

See CPP, OAS and Social Security: How Government Benefits Affect Retirement Planning for more on integrating government benefits into a retirement plan.

Taxes Can Change the Result

Retiring earlier can also change your tax situation.

During your working years, employment income may be your largest source of taxable income. After retirement, the mix may change to investment withdrawals, pension income and government benefits.

The timing of those sources can matter.

For example, an early retirement period with relatively low taxable income may look very different from a retirement plan where large taxable withdrawals begin immediately.

The tax treatment of accounts also differs between countries and between account types, so the best strategy cannot be reduced to one universal withdrawal rule.

Our article How Taxes Affect Your Retirement Plan and Financial Freedom explains why taxes should be modeled as part of the retirement plan rather than treated as an afterthought.

Test a Retirement Age Side by Side

One of the simplest ways to understand early retirement is to compare multiple scenarios.

Imagine a person who is currently 52 and is considering retiring at 55, 58 or 62.

A useful comparison could look at:

• Portfolio value when employment ends
• Years of additional contributions
• Investment growth before retirement
• Annual retirement spending
• Investment withdrawals
• Pension start ages
• Government benefit start ages
• Taxable income
• Portfolio longevity
• Ending portfolio value

You are not looking for one magic retirement age.

You are trying to understand the trade-offs.

What If You Retire Five Years Earlier?

Suppose your original plan is to retire at 65.

You create a second scenario where you retire at 60.

The new scenario might show:

• Five fewer years of employment income
• Five fewer years of planned contributions
• Less time for investment growth before retirement
• Five additional years requiring retirement income
• Earlier portfolio withdrawals
• A longer period before some pensions or government benefits begin
• Different taxable income throughout retirement

The difference can be substantial.

But what matters is not simply whether the portfolio balance is lower. You need to determine whether the overall retirement plan still provides the income and flexibility you want.

What If You Retire Ten Years Earlier?

Now imagine retiring at 55 instead of 65.

The financial difference may be much larger.

You could have ten fewer years of employment income and contributions, while your portfolio may need to fund ten additional years of retirement.

However, that does not automatically mean the scenario fails.

Perhaps you have substantial savings, a pension, rental income or other reliable income. Perhaps you are willing to spend less. Perhaps you plan to work part-time. Perhaps your housing costs will be lower.

The only way to know how these factors interact is to model them together.

Early Retirement Does Not Have to Be All or Nothing

Retirement is often treated as a binary decision: work or stop working.

Real life can be more flexible.

You might:

• Move from full-time work to part-time work.
• Retire from one career and start another.
• Take a sabbatical before returning to work.
• Retire earlier but spend less initially.
• Retire earlier and delay some income sources.
• Work longer while reducing your hours.

These alternatives can change the financial requirements of retirement.

This is another reason to think of retirement planning as scenario planning rather than simply picking one retirement date.

FIRE and Early Retirement

The Financial Independence, Retire Early movement, commonly known as FIRE, has brought considerable attention to early retirement.

The basic idea is straightforward: build enough financial resources that employment becomes optional.

But the same planning principles still apply.

The earlier you stop working, the more important it becomes to understand your spending, savings, investments, taxes, income sources and longevity.

A person retiring at 45 may need a very different strategy from someone retiring at 62, even if both have the same investment balance.

Our article How to Reach Financial Freedom Faster explores some of the strategies that can accelerate financial independence.

Compare Retiring Earlier With Saving More

If your early retirement scenario does not work, you do not necessarily have only one solution.

You could save more.

You could reduce spending.

You could earn additional income.

Or you could retire later.

Our article Should I Save More or Retire Later? How to Improve Your Retirement Plan explores this exact trade-off.

The important thing is to compare the alternatives rather than assuming that one decision is the only answer.

Test Early Retirement Against a Longer Life

Early retirement can make longevity risk more important because your retirement may span several decades.

A plan that works through age 90 may look very different if you live to 100.

That does not mean everyone should plan to a particular age. It means that longevity is an assumption worth testing.

Read What If I Live to 100? How to Plan for Longevity Risk to explore this scenario in more detail.

Test Early Retirement Against a Market Crash

Another important question is what happens if markets perform poorly soon after you retire.

This can be particularly important for early retirees because withdrawals may begin while the portfolio still needs to support many future years.

A market decline does not automatically mean an early retirement plan will fail. The effect depends on the size of the portfolio, withdrawal needs, other income sources, spending flexibility and what happens to markets afterward.

That is why the scenario should be tested rather than assumed.

See What Happens If the Stock Market Crashes After I Retire? for a deeper discussion.

Test Lower Investment Returns

You should also test what happens if your investment returns are lower than expected.

An early retirement plan can be particularly sensitive to assumptions about investment growth because the portfolio may need to provide income for a long period.

Try testing a lower-return scenario and compare it with your original projection.

Read What If My Retirement Investments Earn Less Than Expected? for more on this type of stress test.

Use Early Retirement as a What-If Scenario

An early retirement scenario does not have to replace your primary retirement plan.

It can simply be a What-If.

This is an important distinction.

You can maintain a base plan with your preferred retirement age and then create alternative scenarios to answer questions such as:

• What if I retire three years earlier?
• What if I retire five years earlier?
• What if I retire ten years earlier?
• What if I save more first?
• What if I spend less?
• What if I work part-time?
• What if I delay a pension?
• What if I delay government benefits?
• What if investment returns are lower?

Our guide 10 Retirement What-If Scenarios Everyone Should Test provides more ideas.

How Retirementize Can Help You Test Retirement Age

Retirementize is built around the idea that a retirement projection should be something you can explore, not simply something you accept.

Start with your current financial situation and build a retirement plan using your income, spending, investments, accounts, pensions, government benefits, housing and other relevant information.

Then change your retirement age.

One of the useful features for this type of planning is that Retirementize allows individual age settings for accounts and pensions.

That means an early retirement scenario can be more detailed than simply changing your retirement date.

For example, you could test:

• Retiring at 55 while leaving a particular investment account untouched until later.
• Retiring at 58 and starting a pension at a different age.
• Retiring at 60 while delaying other income sources.
• Changing when individual accounts begin contributing to retirement income.
• Comparing different combinations of account and pension timing.

This lets you see how changing retirement age interacts with the rest of your financial plan.

The objective is not to tell you which retirement age to choose. It is to give you better information for making the decision yourself.

Is Your Early Retirement Plan Actually on Track?

After testing several retirement ages, you need a way to evaluate the results.

Does the plan continue to support your desired spending? Does income remain adequate? Does the portfolio remain sustainable? Are taxes manageable? Do your pensions and government benefits arrive when you expect them to?

These are the questions that matter more than simply asking whether a retirement calculator says "yes" or "no."

Read How Do I Know If My Retirement Plan Is on Track? for more ways to evaluate your overall retirement plan.

How Much Retirement Income Will You Need?

Ultimately, the early retirement question comes back to income.

If you retire early, how much income will you need from your investments and other sources?

The answer depends on your spending, taxes, pensions, government benefits, investment withdrawals and other sources of income.

Our guide How Much Retirement Income Do I Need? Build a Retirement Income Plan explores this question in more detail.

Testing Early Retirement Is Better Than Guessing

If you dream about retiring early, you do not need to immediately decide whether the idea is realistic.

Test it.

Change the retirement age. Adjust the account ages. Change pension timing. Test government benefit timing. Look at spending. Test investment returns. Explore different savings levels.

Then compare the results.

You may discover that you can retire earlier than expected.

You may discover that retiring earlier requires some changes.

Or you may discover that working a few additional years creates significantly more financial flexibility.

All of those are useful discoveries.

PLAN. IMPROVE. TEST. CONFIRM. REPEAT.

Early retirement is a perfect example of why retirement planning should be an iterative process.

PLAN. Build a complete picture of your finances and choose a starting retirement age.

IMPROVE. Look for ways to strengthen the plan through savings, spending, income, taxes, investment strategy or retirement timing.

TEST. Move the retirement age and explore different account, pension, government benefit, spending and investment assumptions.

CONFIRM. Determine whether the resulting plan supports the retirement lifestyle and financial flexibility you want.

REPEAT. Keep testing as your circumstances and goals change.

PLAN. IMPROVE. TEST. CONFIRM. REPEAT.

Frequently Asked Questions

What happens if I retire early?

Retiring early can mean fewer years of employment income and savings, less time for investments to grow, more years of retirement withdrawals and potentially different pension and government benefit timing. The actual effect depends on your individual financial situation.

How do I know if I can retire early?

Build a retirement projection using your savings, investments, spending, income, pensions, government benefits, taxes and expected longevity. Then test earlier retirement ages and compare the results with your preferred retirement plan.

What age is considered early retirement?

There is no single definition that applies to everyone. The more useful question is whether retiring at a particular age is financially sustainable for your circumstances.

Should I retire early if I have enough money?

Having enough assets is only one part of the decision. You should also consider spending, taxes, investment withdrawals, pensions, government benefits, healthcare and other sources of income and expenses that may change throughout retirement.

Should I start my pension when I retire?

Not necessarily. The appropriate timing depends on the specific pension, your financial circumstances, other income sources, taxes, longevity and your overall retirement strategy. Modeling different pension start ages can help show the trade-offs.

Can I retire early and delay government benefits?

Depending on the benefit program and your eligibility, delaying benefits can be one strategy worth evaluating. The decision should be considered alongside portfolio withdrawals, taxes, longevity and other retirement income.

What should I test if I want to retire early?

Test multiple retirement ages, spending levels, investment returns, inflation assumptions, pension start ages, government benefit timing, account withdrawal timing and longevity. Also consider testing difficult market conditions.

Build Your Early Retirement Scenario

If you are wondering whether you can retire early, do not rely on a single number or a single projection.

Build the plan. Change the retirement age. Test different account and pension timing. Explore different spending levels and investment assumptions. See how government benefits and taxes affect the result.

Then compare the alternatives.

Retirementize gives you a way to build this kind of detailed retirement scenario and test different decisions before you make them in real life.

The goal is not to predict exactly what will happen. The goal is to understand what would happen under different reasonable assumptions so you can make a better decision about when to retire.