What is the Rule of 55?

The Rule of 55 allows you to withdraw from your 401k without the 10% early withdrawal penalty if you leave your job in the year you turn 55 or later. Important: it only applies to the 401k from the employer you're leaving, not old 401ks or IRAs. You still pay income tax on withdrawals.

How much do I need to retire at 55?

For a 35-year retirement, target 25-28× annual expenses. At $54,000/year spending ($4,500/month), you need $1.35-1.5 million. Social Security will eventually reduce the draw on savings, but you need enough to bridge 7-12 years without it. Healthcare adds ~$120-150k for the decade before Medicare.

Can I retire at 55 with $500,000?

Difficult in the US without other income. $500k at 4% = $20,000/year. Combined with eventual Social Security (~$20k/year at 62), you'd have ~$40k/year - tight but possible in low-cost areas. Consider: 1) part-time work, 2) relocating abroad, 3) waiting a few more years to build savings.

Is 55 a good age to retire?

Financially, 55 is an excellent early retirement age. The Rule of 55 provides 401k access, you're only 10 years from Medicare (vs 15 at age 50), and you're 7-12 years from Social Security. You're still young enough to enjoy active retirement while having more financial security than retiring at 50.

Retirement Age

Can You Retire at 55? Rule of 55 Calculator

Age 55 is a strategic retirement milestone thanks to the Rule of 55, which allows penalty-free 401k withdrawals. You're also just 10 years from Medicare and 7-12 years from Social Security. Use this calculator to see if your savings can support retirement at 55.

Key Facts

Rule of 55: access 401k penalty-free

10 years until Medicare (65)

7-12 years until Social Security (62-67)

Need to fund 35+ years of retirement

Healthcare: budget $12-15k/year until 65

More viable than retiring at 50

Calculate How Long Your Money Will Last

Enter your savings and expenses for a quick estimate

Country / Currency

Current Savings *

Monthly Expenses *