For many Americans, the magic number for retirement is $1.26 million, according to Northwestern Mutual, and the average age of retirement is 62, according to Guardian Life.
In other words, most people are trying to get into the seven-figure club by the time they reach their 60s. But you could be on track to retire earlier than that, perhaps with less money than you initially anticipated.
Here are the top five signs that you’re on track to afford to retire earlier than you think.
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No mortgage or consumer debt
Retiring or approaching retirement with a debt burden is surprisingly common. Roughly 75% of Americans over the age of 50 hold at least some form of debt and 84% of them say borrowing money is necessary to make ends meet, according to the AARP.
As you can imagine, this isn’t a comfortable way to retire. You can’t enjoy your golden years in peace if you’re up at night thinking about interest rates and the global economy.
This is why paying off all your debt — including your mortgage — puts you in a better position than the majority of seniors and could allow you to retire sooner than you expect.
Diversified streams of cash flow
Most retirement plans hinge on typical sources of income such as interest, dividends or pension benefits.
However, if you have a plan that incorporates more sources, perhaps rental income from properties or passive income from a side venture, your finances are much more robust than the average retiree.
If you’re trying to retire before you turn 60, finding new sources of passive income could be essential.
Read more: You don’t have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here’s how
Relatively high savings rate
As of May, 2025, the average personal savings rate in America is 4.5%, according to the Federal Reserve. If you and your family are saving more than that, it could be a green signal that you’re approaching retirement faster than most of your peers.
Firstly, a higher savings rate can get you to your goal quicker. As an example, someone who only saves 4.5% of their $100,000 income and invests it in an asset that delivers 10% annual growth can reach $1.2 million within 35 years. If this person can double their savings rate to 9%, they can get to $1.2 million in less than 28 years — or seven years earlier.
Not only does a higher-than-average savings rate help you achieve your goals faster, it also indicates a more stable retirement. It’s a sign that you have the willpower and discipline to live below your means and stick to a budget, which are essential skills for retirees on a fixed income.
Empty nest with no financial assistance
Having dependents reshapes your financial situation and could be the deciding factor for whether or not you can retire. This is why many parents have to wait until their children are adults and have their own sources of income to consider retiring.
Unfortunately, the housing and cost-of-living crisis has pushed many adults to rely on their parents for support.
As of 2025, roughly 50% of parents with children over the age of 18 gave at least some form of financial assistance to them, according to Savings.com.
If you’re part of the other half — with independent children — you’re in a better position to retire earlier.
Good health
Healthcare costs can make or break your retirement. A sudden spike in health insurance or a serious medical issue can derail your financial plan.
However, if you have managed to take better care of yourself, perhaps by quitting smoking, limiting alcohol or regularly working out, you could qualify for lower insurance premiums and be less exposed to this risk.
Simply put, good health is a key ingredient for a cheaper, earlier and more enjoyable retirement.
What to read next
- Financial aid only funds about 27% of US college expenses — but savvy parents are using this 3-minute move to cover 100% of those costs
- Here are the 6 levels of wealth for retirement-age Americans — are you near the top or bottom of the pyramid?
- Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
- How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
