Skip to main content
Advertiser Disclosure
We do receive compensation from some partners whose offers appear on this page. We have not reviewed all available products or offers. Compensation may impact the order in which offers appear on page, but our editorial opinions and ratings are not influenced by compensation.

The Ascent Logo The Ascent Logo - Blue circle with an A in it and the ascent a motley fool company to the right of that

  • Credit Cards
  • Banking
  • Brokerages
  • Loans
  • Mortgages
  • Knowledge
  • Latest Picks
  • Search Icon Click here to search

Credit Cards

Top Picks
  • Best of January 2021
  • Cash Back
  • Balance Transfer
  • Travel
  • 0% APR
  • Rewards
  • Bad Credit
Knowledge
  • Beginners Guide to Credit Cards
  • How to Rebuild Your Credit
  • Maximize Your Credit Card Rewards
  • Learn More About Credit Cards
Credit Card Tools
  • Compare Cards
Looking for a new credit card?

Explore the best credit cards in every category as of January 2021.

Get started!

Banking

Top Picks
  • Best Savings Accounts
  • Best Bank Accounts
  • Best Money Market Accounts
  • Best CDs
  • Best Checking Account Bonuses
Knowledge
  • Beginners Guide to Banking
  • Everything You Need to Know About Savings
  • Money Market Accounts Made Easy
  • Learn More About Banking
Looking for a place to park your cash?

Check out our top picks of the best online savings accounts for January 2021.

Get Started!

Brokerages

Top Picks
  • Best Brokers of January 2021
  • Best Online Brokers for Beginners
  • Best Options Brokers
  • Best IRA Accounts
  • Best Roth IRA Accounts
  • Best Robo Advisors
Knowledge
  • How to Open a Brokerage Account
  • Beginner's Guide to Brokerages
  • Learn More About Brokerage
Just getting started?

Explore our picks of the best brokerage accounts for beginners for January 2021.

Get Started!

Loans

Top Picks
  • Best Loans of January 2021
  • Best Personal Loans for Bad Credit
  • Best Loans for Debt Consolidation
  • Best Low-Interest Personal Loans
  • Best Personal Loans for Good Credit
  • Best Personal Loans for Fair Credit
Knowledge
  • Personal Loans Made Easy
  • Debt Consolidation Guide
  • How to Pay Off Debt
  • Learn More About Loans
Thinking about taking out a loan?

Before you apply for a personal loan, here's what you need to know.

Get Started!

Mortgages

Top Picks
  • Best Mortgage Lenders of January 2021
  • Best Mortgage Lenders for Poor Credit
  • Best Refinance Lenders
  • Best VA Mortgage Lenders
Knowledge
  • First Time Homebuyers Guide
  • Home Loans Made Easy
  • The Complete Guide to Refinancing
  • How to Get a Mortgage with Bad Credit
  • Learn More About Mortgages
Tools & Calculators
  • Mortgage Calculator
Compare Rates
  • Today's Mortgage Rates
  • Refinance Rates
  • 15-Year Mortgage Rates
  • 20-Year Mortgage Rates
  • 30-Year Mortgage Rates
  • Jumbo Mortgage Rates
  • VA Loan Rates
  • 5/1 ARM Rates
  • 7/1 ARM Rates
  • FHA Mortgage Rates

Knowledge

Knowledge Section
  • All Articles
  • Credit Card Articles
  • Banking Articles
  • Brokerage Articles
  • Personal Loan Articles
  • Mortgage Articles
  • Personal Finance Articles
Recent Articles
  • 5 Behavioral Traits to Avoid if You Want Financial Freedom

    Banks

    5 Behavioral Traits to Avoid if You Want Financial Freedom
  • Maxed Out Your Emergency Fund? 3 Other Places to Put Your Money

    Banks

    Maxed Out Your Emergency Fund? 3 Other Places to Put Your Money
  • Will You Get a Second Stimulus Check?

    Banks

    Will You Get a Second Stimulus Check?
  • Stimulus Check Update: $1,400 Checks Now on the Table

    Personal Finance

    Stimulus Check Update: $1,400 Checks Now on the Table
  • The Ascent
  • Knowledge
  • Brokerages

The New Graduate's Guide to Retiring by 50

by Christy Bieber | June 10, 2019

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

Hoping to retire by 50? Here are some of the key steps you should take now to make sure you're ready.

mature man and woman taking a selfie in front of a hotel and palm trees

Image source: Getty Images

Did you just graduate? Congrats! You've got lots of exciting adventures ahead of you -- and you also have the chance to accomplish some lofty financial goals.

When you're setting these goals, perhaps early retirement is one you want to aim for -- even very early retirement. Leaving work by 50 would give you the chance to travel the world, to sip mai tais on the beach for decades, or to chart your own course and have big adventures. And you have time on your side when it comes to saving, so the goal of retiring by 50 is definitely achievable if you're willing to work for it.

Not sure how to start? Just follow this guide!

Figure out how much you need to save

The first step to retiring by 50 is deciding how much money you'll actually need to save up by then. This can be difficult to estimate. After all, most of the methods for figuring out your retirement income require you to project how much money you'll need in 30 years or so.

The Ascent's picks for the best online stock brokers

The Ascent's picks for the best online stock brokers

Find the best stock broker for you among these top picks. Whether you're looking for a special sign-up offer, outstanding customer support, $0 commissions, intuitive mobile apps, or more, you'll find a stock broker to fit your trading needs.

See the picks

Fortunately, there are lots of retirement calculators online you can use to estimate your desired retirement savings number. Remember, though, that you need to aim high. If you retire at 50, your retirement savings will need to support you for a long time -- likely 30 years or more. You'll also need to provide your own health insurance from age 50 to age 65, when you become eligible for Medicare. That alone could cost you $100,000 or more. And even after they're on Medicare, most Americans spend several hundred thousand dollars on healthcare throughout retirement, so be sure to factor that into your future income needs.

Set a monthly savings goal

Once you have a total savings target, you need to decide how much to save each month to reach that goal. Since you have a shorter time frame than most when you retire at 50, it's especially important to start saving immediately and aggressively. You'll need to save way more than 10% of your income if you want to retire that young.

Say you're 21 years old and have decided you want to retire at 50 with $2 million. You have 29 years to save. If you invested $20,000 annually at a 7% return, you still wouldn't hit your target; you'd end up with about $1.75 million. That seems like a lot, but when you adjust for inflation, it's only around $722,000 in today's dollars, which is not enough to sustain you for 40 years.

Again, you can use a retirement savings calculator to figure out how much you need to save each month to hit your target. You can always scale up your savings and don't necessarily have to start saving $20,000 per year at age 21, but remember that the longer you wait, the less time you have to use the power of compound interest.

Compound interest is almost like magic, because it helps investments grow exponentially. When you earn a return on an investment, these gains grow your pot of invested funds, and you begin to earn returns on the investment gains. This has a snowball effect, because even if you don’t put in any more money, you’re earning returns on a bigger investment balance all the time. That's why saving aggressively when you're younger can put you at a huge advantage.

If you want to hit that $2 million goal by age 50, you could do it if you saved $22,850 per year starting at 21. But if you waited a decade and started saving at age 31, you'd need to raise your savings to $53,500 per year to reach the same target. That's more than double!

Figure out what account you'll save in

All of the above savings calculations assumed you'd be putting money into a tax-advantaged retirement account, such as a 401(k) or IRA. The only problem is, while these accounts provide generous tax breaks for retirement savings, they also come with restrictions. And one of those restrictions is that you can't take out money until you're 59 1/2 without incurring penalties.

Buying your first stocks: Do it the smart way

Once you’ve chosen one of our top-rated brokers, you need to make sure you’re buying the right stocks. We think there’s no better place to start than with Stock Advisor, the flagship stock-picking service of our company, The Motley Fool. You’ll get two new stock picks every month from legendary investors and Motley Fool co-founders Tom and David Gardner, plus 10 starter stocks and best buys now. Over the past 17 years, Stock Advisor’s average stock pick has seen a 569% return — more than 4.5x that of the S&P 500! (as of 1/15/2021). Learn more and get started today with a special new member discount.

Start investing

There is a way to tap your funds early, but it’s complicated and you probably won’t be able to withdraw as much as you need. To avoid the hassle of complying with difficult rules, you'll need to invest some money in a regular brokerage account that you can live on from age 50 to age 59 1/2, when you can start dipping into your retirement accounts. Unfortunately, ordinary brokerage accounts don't come with any big tax breaks, which can make it harder to reach your savings goals.

If you decide to invest in a regular brokerage account, split your savings so the brokerage account only winds up with enough money to cover your first 9 1/2 years of retirement -- and then invest the difference in your 401(k) or IRA.

Set up automatic contributions

Once you know how much to save -- and in what accounts -- you should automate transfers to your retirement savings so you can ensure you hit your goal. If your money goes into savings before you have the chance to spend it, then you'll have far better odds of achieving your financial goals.

You can retire by 50 -- but it will take work

To retire by 50, it's best to keep your expenses as low as possible and avoid lots of consumer debt. This will not only ensure you can invest more for retirement, but also allow you to live on less after you leave work so your nest egg lasts longer. It will take effort and sacrifice, but if financial freedom is worth it to you, then you'll have no regrets.

Using the wrong broker could cost you serious money

Over the long term, there's been no better way to grow your wealth than investing in the stock market. But using the wrong broker could make a big dent in your investing returns. Our experts have ranked and reviewed the top online stock brokers - simply click here to see the results and learn how to take advantage of the free trades and cash bonuses that our top-rated brokers are offering.

About the Author

Christy Bieber
Christy Bieber icon-button-linkedin-2x

Christy Bieber is a personal finance and legal writer with more than a decade of experience. Her work has been featured on major outlets including MSN Money, CNBC, and USA Today.

Share This Page
Blue Facebook Icon Share this website with Facebook
Blue Twitter Icon Share this website with Twitter
Blue LinkedIn Icon Share this website with LinkedIn
Blue Mail Icon Share this website by email

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

Featured Offer

Merrill Logo

4.5 Star Rating - $0 stock trades & up to a $600 bonus

Open Account

Related Articles

Stock prices moving on a screen image for Best Online Stock Brokers for 2021

Best Online Stock Brokers for 2021

Stock numbers keyboard image for How to Open a Brokerage Account: A Step-by-Step Guide

How to Open a Brokerage Account: A Step-by-Step Guide

Man sitting at a desk celebrating with a fist pump image for Best Online Stock Brokers for Beginners in 2021

Best Online Stock Brokers for Beginners in 2021

Golf Swing image for Best Online Stock Brokers for IRAs in 2021

Best Online Stock Brokers for IRAs in 2021

Featured Articles

Best Online Stock Brokers for 2021

How to Open a Brokerage Account: A Step-by-Step Guide

Best Online Stock Brokers for Beginners in 2021

Best Online Stock Brokers for IRAs in 2021


We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.

The Ascent Logo

The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.

btn_facebook-yellow btn_twitter-yellow btn_instagram-yellow

Copyright © 2018 - 2021 The Ascent. All rights reserved.

About The Ascent
About Us Contact Us Newsroom How We Make Money Editorial Integrity Ratings Methodology
Legal
Terms of Use Privacy Policy Accessibility Policy Terms and Conditions Copyright, Trademark and Patent Information
Learn
Credit Cards Banking Brokerage Loans Recent Articles

By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.

Back to The Motley Fool