Personal Finance

I'm looking to retire in my 50s while my kids are still in college - how should I handle this transition with my finances?

Maurie Backman

Published: January 26, 2025 9:26 am

Retiring in your 50s, as opposed to your 60s, can bring about certain challenges. For one thing, you’re not yet eligible for Social Security, so you may have to live off of your savings for a good number of years before those benefits become available to you. You’re also a good number of years away from being eligible for Medicare, so you’ll need to figure out what you’ll do for healthcare coverage.

But retiring in your 50s could be an even bigger challenge if you’ll still have kids in college at that point. That’s the situation this Reddit poster is in. They’re trying to plan for an early retirement, but they know they’ll have three kids in college when they’re in their 50s. And they’re wondering if they’ll be able to stop working completely, or if they’ll need to keep working in some capacity.

It’s a good thing that this poster is thinking about college costs as part of their retirement plan. And while I think their plan to retire in their 50s is generally doable, it’s important to run the numbers carefully.

Aim to have college paid for first

If you’re going to retire in your 50s and know that you’ll still have kids in college at that point, one big piece of advice I have is to make sure those education costs are paid for in advance. In other words, make certain your kids’ college accounts are fully funded, or otherwise set ground rules so your kids know what costs you can afford and how much they might have to borrow should they choose expensive schools.

Retiring in your 50s, as mentioned earlier, means not being able to collect Social Security for a while. So as it is, you might be draining your savings quite a bit those first few post-working years. You don’t want to add to that drainage by having to pull out thousands of dollars a year to cover your kids’ education.

Remember, too, that some people opt to attend graduate school after college to secure good careers. Before you retire, decide if that’s an expense you want to help your kids finance. And if so, you may want to work a few extra years to bank the money to do that.

Make sure early retirement won’t mean compromising your lifestyle

College is a big expense a lot of families have to cover in their 50s. But with proper planning, it doesn’t have to be an impediment to early retirement.

However, if you’re hoping to retire early, you’ll need to run the numbers and see if your nest egg is large enough to support the lifestyle you’re hoping for. And that’s a question that can only be answered on a case-by-case basis.

The poster above thinks they’ll end up with $4 million to $5 million in savings by their mid-50s. That’s certainly a decent chunk of money to retire on at that age. But you might reach your mid-50s with only $2 million saved — or less. So you’ll need to see if that’s enough savings to be able to pull off the retirement you want.

And who knows? If the poster above ends up wanting to live a lavish lifestyle in retirement, then $4 or $5 million may not even end up being enough for them. It all depends on personal choices.

That’s why my best advice in this situation is to consult a financial advisor. A professional can help you decide when it’s best to stop versus continue working based on your individual situation and goals. And they can also help identify expenses you may not have considered, like potentially helping support your children in the year or two after they graduate college, when making your decision.