Retiring in Your 50s Is the American Dream for Many — 5 Budget Tips To Make It a Reality

G. Brian Davis

Tue, Jun 17, 2025, 10:30 AM 4 min read

Retiring in your 50s doesn’t require a superpower, a trust fund or winning the lottery, but it does require discipline. Since your investments will have less money to compound, you’ll need to contribute more of your own cash each month.

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If early retirement is something you’re interested in, here’s some advice and budget templates from early retirees to put you on the same path.

Family law practitioner Katie L. Lewis recounted a client of hers who retired young. “My client adhered to a strict budget, allocating a significant portion of their income to savings and investments.”

Specifically, they allocated the following according to Lewis:

• Essentials (housing, utilities, groceries): 40%

• Savings and investments: 30%

• Discretionary spending (travel, dining out, entertainment): 20%

• Miscellaneous (healthcare, insurance): 10%

David Blain, a financial advisor with BlueSky Wealth Advisors, provided this example of a typical pre-retirement budget:

• Housing: 25-30%

• Utilities: 5-10%

• Food: 10-15%

• Transportation: 10-15%

• Healthcare: 5-10%

• Savings/Investments: 20-25%

• Discretionary spending: 10-15%

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As we saw in the previous budget examples, while there are variations in how much money each individual allocates to their spending, you can see one common factor: a higher-than-average savings rate.

Blain has seen this as a consistent pattern among his clients who have retired early. “Start saving early and consistently. Live below your means, and in particular, avoid lifestyle inflation,” he said. “They also prioritized paying off high-interest debt early and invested in diversified portfolios to benefit from compound growth.”

He also pointed out that many of his clients have grown their savings by increasing their income. “Consider part-time work or side gigs to supplement your income,” Blain advised.

One way to avoid paying exorbitant taxes is by investing through tax-advantaged retirement accounts. “Many of my clients focused on maxing out their retirement accounts, such as 401(k)s and IRAs,” says Blain.

While you can’t access the money until you turn 59 ½, you can combine these tax-sheltered accounts with standard taxable investments, which you can draw on early in your retirement. Some employers even offer to put their money toward your retirement savings through matching or other programs. But you have to invest first.