315: Retiring at 55 Is Easier Than You Think… Until This Happens

[EPISODE]

[00:00:45] Hilary Hendershott: If you retired at 55 and the market dropped 25% in your first two years, would you know exactly what to do? Would you trust your plan, or would you second-guess it? Because that’s the moment most early retirement plans are actually tested. That is the real question behind early retirement. If you’ve done everything right, you’ve saved, you’ve invested, and still there’s the question in the background: could I actually retire earlier than I planned?

[00:01:09] Retiring at 55 sounds simple until you really think about what your money needs to do. It’s not just about having enough. It’s about whether your money can support your life for decades because retiring early doesn’t just change your schedule. It changes your entire financial picture. When people ask, “Can I retire at 55, Hilary?” what they’re usually asking is, “Do I have enough money?”

[00:01:32] But that’s not the most useful question because being ready for retirement isn’t just about a number. It’s about the plan and the decision-making, confidence behind that number. And when you’re retiring early, that’s what matters even more. If you’re thinking about retiring at 55, you’re not just retiring, you’re extending retirement.

[00:01:51] You may be looking at forty-plus years of income that your portfolio needs to support, and that’s where things start to change. The first thing that changes is the time calculation. Your money obviously has to last longer through more market cycles with less room for error. Um, then there’s taxes and access.

[00:02:10] Before age fifty-nine and a half, accessing certain accounts can be restricted or penalized if not structured properly. And even beyond that, uncoordinated withdrawals can quietly increase your tax burden year after year. Then there’s the healthcare gap, that gap between early retirement and Medicare eligibility at 65.

[00:02:31] For a lot of people, that becomes a meaningful expense that needs to be planned for well in advance. And then there’s one of the biggest risks and one of the least understood. What happens if the market does not cooperate early on? If you retire and the market declines in those first few years while you’re taking withdrawals, you’re not just experiencing a downturn, you’re locking in losses, and that can permanently change how long your portfolio lasts.

[00:02:58] So, this isn’t just about average returns over time. It’s about the order those returns show up in, and you can’t control that, but you can plan for it. And there’s another layer that matters just as much. When you retire at 55, you’re not just planning for the expected, you’re planning for decades of the unexpected: health events, life changes, economic cycles, geopolitical uncertainty.

[00:03:22] Over a long retirement, you absolutely will experience several of these, sometimes at the same time. So, the question is not, “Do I have enough if everything goes right?” The question is, “Do I understand how my plan holds up when things don’t go to plan?” And equally important, do I trust myself to make good decisions when things feel urgent or unprecedented?

[00:03:47] Because that’s what real confidence looks like. So, when you zoom out, the question becomes less about can I retire at 55 and more about, can my plan support me at 55 through all of it? And can I execute on it when it matters? This is where I see the biggest disconnect. Most people are focused on what’s my number, but what actually matters is: how does my money turn into income?

[00:04:13] In retirement, your portfolio isn’t just something you grow, it’s something that needs to pay you. And this is where we introduce a concept that we use with our clients. That’s your annual spending number or ASN. Your ASN is simply the amount your portfolio needs to produce each year to support your life, including taxes.

[00:04:32] It’s not today’s top-line income, it’s not a generic percentage, it’s your actual lifestyle. Because for some people, that means traveling more, supporting family, or giving generously. For others, it means something entirely different. This is where retirement becomes personal, and it’s where clarity starts.

[00:04:50] Once you understand your ASN, everything else begins to connect: your investment plan, your withdrawal strategy, your tax approach, your timeline. Without it, you are guessing. With it, you are planning. Let me say this directly. If you’ve built meaningful wealth, it’s completely reasonable to ask, “Am I on track? Can I do this sooner?”

[00:05:12] But confidence comes not from seeing a large number. It comes from knowing how your income will show up, how that happens in different environments, and how you’ll respond when things change. Retirement isn’t just a financial decision, it’s a life transition, and for many people, it’s where uncertainty shows up.

[00:05:31] So, you’ve done well saving and investing, but you haven’t translated that into a clear plan for how it all works together. How a plan comes together matters. We created a retirement guide to help you do exactly that. It walks you through how to calculate your ASN, how to think about your timeline, and the biggest risks that can quietly undermine early retirement.

[00:05:55] The goal is simple: to move you from feeling like you’re probably okay to actually knowing where you stand. You can download it below. If you’re even considering retiring early, it will help you to see your situation more clearly within minutes. Retiring at 55 isn’t unrealistic, but it does require more than strong savings.

[00:06:14] It requires a plan that accounts for time, taxes, income, and uncertainty, and the judgment to navigate the moments that test it. When these pieces are in place, early retirement shifts from a question to a decision you can make with confidence. And if you want help thinking through your situation, that is a conversation my team and I are always here to have.

[00:06:36] If you’re thinking about your next financial chapter and want a partner who looks at the full picture, not just your investments, we’d love to connect. We’re a fee-only fiduciary team focused on after-tax outcomes and long-term planning, helping our clients keep more of what they earn so their money can support the life they’re building.

[00:06:55] If that sounds like the kind of guidance you’re looking for, you can schedule a complimentary conversation with one of my lead advisors by visiting hendershottwealth.com/contact to see if our approach is the right fit for you.

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