Many workers dream of early retirement, and new data from Charles Schwab tells us that young Americans are no exception. Those between the ages of 16 and 25 expect to retire at age 60, on average, which is seven years earlier than full retirement age for Social Security purposes.

But whether they actually get to retire at 60 is a different story. At present, young adults have only $1,628, on average, in savings, yet they're on the hook for an average of $8,003 in debt. And while 53% believe their parents will leave them some sort of inheritance, that's certainly not something to bank on for funding their golden years.

Group of six young adults with arms around one another


If you're serious about retiring at age 60, or anywhere in that vicinity, you'll need to start saving early on, all the while working to steer clear of debt between now and your golden years. Otherwise, you may need to seriously reset your expectations.

The challenge of early retirement

There's nothing wrong with aiming to retire early, but getting there requires a solid commitment from the get-go. Now, the good news for younger adults is that they have time on their side. The problem, however, is that the typical young American already has significantly more debt than savings, and continuing that pattern will not only derail their retirement dreams but upend their finances during their working years.

But let's address one key issue with retiring at age 60. Not only is it a solid seven years before Social Security full retirement age kicks in, but it's also two years prior to when eligibility to collect benefits begins. In case you're not familiar with Social Security, anyone born in 1960 or later can collect his or her full monthly benefit -- a number based on lifetime earnings -- starting at age 67. Meanwhile, the earliest age to file for Social Security is 62, but taking benefits at that time will reduce them to only 70% of what they would've been at full retirement age. Either way, retiring at 60 means doing so without any sort of Social Security income to fall back on, and that puts quite the burden on individual savings.

Taking control of your fate

So let's talk about individual savings, because if you want a shot at early retirement, you'll need to do a pretty good job of funding your nest egg during your working years. Currently, workers under 50 can contribute a maximum of $18,500 per year to a 401(k) and $5,500 to an IRA. Workers 50 and over, meanwhile, get catch-up provisions that raise these limits to $24,500 and $6,500, respectively, which means that as you get older, you'll have an even greater opportunity to save. But in reality, now's the time to really want to work on getting as much money into your retirement plan as possible.

The reason? The earlier you start saving money, the more time you give yourself to let compounding work its magic and grow your wealth. Check out the following table, which further illustrates the importance of setting money aside at an early age:

If You Start Saving $500 a Month at Age:

Here's Roughly What You'll Have by Age 60 (Assumes an Average Annual 7% Return):


$1.03 million










As you can see, you'll have a much better chance of retiring at 60 if you begin saving at 22, which is a common age to get your first full-time job. Wait too long, however, and you'll risk falling short.

Another thing to note is that the 7% average annual return referenced above is actually a couple of percentage points below the stock market's average. If you want to grow your wealth, loading up on stocks is really the way to go, and when you're young, you have plenty of time to ride out the market's downturns to come out ahead. Invest too conservatively, on the other hand, and you'll see a lower average annual return that might derail your early retirement efforts.

Retiring at 60 may or may not happen depending on the effort you're willing to put forth and the investment strategy you're willing to adopt. If that's your goal, then be sure to focus on saving throughout your career, all the while taking care to stay out of debt. Stick to those rules, and there's a good chance that come age 60, you'll be enjoying a life of leisure while your friends are still busy plugging away at their desk jobs.