What is Early Retirement? Early Retirement means permanently leaving full-time paid work before the traditional age of 65, typically anywhere from the late 30s to the late 50s, supported by investment income rather than employment. It is the “RE” in FIRE, though in practice most early retirees continue to earn something from passion projects, consulting, or writing.
Worked example: a 42-year-old with $1.1M invested, $40,000/year in expenses, and a 3.6% withdrawal rate has a ~95% success probability over a 50-year horizon according to historical backtests. Compare to a traditional retiree at 65 with a shorter 25-year horizon, who can safely withdraw 4.5–5%. The longer your post-work life, the more conservative your withdrawal rate must be, and the larger your required portfolio.
Early Retirement’s hidden challenges are non-financial: identity, social connection, healthcare (especially US ACA pre-65), and filling 16 waking hours. Many early retirees report a 6–18 month “decompression” phase before rediscovering purpose-driven work, often unpaid, often more fulfilling than their former career.