If you want to say goodbye to the working world by the time you turn 50, you need money — a lot of money. The core challenge is the same as any other early retirement: You have fewer working years to build your nest egg and more time to spend it. While you don't need to be an oil baron or a millionaire's offspring to retire at 50, here's what you do need: an extra-disciplined approach to saving and spending, a clear view of the obstacles you'll face, a lot of planning and a little faith.
First, let's do a little back-of-the-napkin math to figure out how much money you'll need. According to the Centers for Disease Control and Prevention, a resident of the United States can expect to live to about 79.9 years old. Many financial advisers recommend budgeting to spend between 55 and 80 percent of your annual pre-retirement income to keep your standard of living [source: Fidelity]. If you live off $60,000 a year while you're working, that means you'll need between $33,000 and $48,000 a year during retirement. So, if you live until age 80, you'll need to have assets valued between $990,000 and $1.44 million. You can use a retirement calculator, like this one offered by Vanguard, to figure out how whether you're on track to retire comfortably at 50 depending on how much you're making and saving currently.
But finding the true number is much more complicated. Inflation has a huge impact on your retirement budget: According to the Bureau of Labor Statistics, a person who lived on $60,000 in 2001 would need around $92,000 to have the same buying power just 20 years later. There are also health care expenses, which have risen significantly faster than inflation in the past decade [source: Patton]. You'll most likely need to purchase private insurance to cover your health until you're eligible for Medicare, and don't expect to stop paying when you reach 65: A healthy 65-year-old married couple without chronic conditions retiring in 2019 can expect to pay $387,000 out-of-pocket during their retirement. A healthy 50-year-old couple retiring in 2019 could expect to spend $405,000 [source: Annuity].
The amount you need to retire also depends on your individual circumstances and retirement goals. Do you have children? Do you have debt? Are you planning to enjoy the luxurious fruits of your labor, or will you retire in austerity? The magic amount you'll need to retire can vary widely depending on your answers to these questions, and you'll probably want to speak with a financial adviser to get a better guess.
Let's look at how to go about saving and investing for retirement at age 50.