How to retire at 55 with no money? (2024)

How to retire at 55 with no money?

If you retire with no money, you'll have to consider ways to create income to pay your living expenses. That might include applying for Social Security retirement benefits, getting a reverse mortgage if you own a home, or starting a side hustle or part-time job to generate a steady paycheck.

Can you retire at 55 and collect Social Security?

However, you unfortunately cannot begin receiving Social Security retirement benefits at 55. The earliest age you can begin drawing Social Security retirement benefits is 62. But there's a catch. Taking Social Security benefits prior to reaching your full retirement age results in a reduction of your benefit amount.

What happens if you retire with no savings?

Many retirees with little to no savings rely solely on Social Security as their main source of income. You can claim Social Security benefits as early as age 62, but your benefit amount will depend on when you start filing for the benefit. You get less than your full benefit if you file before your full retirement age.

How much money does a 55 year old need to retire?

How Much Money Do I Need to Retire at 55? On average, you'll need to have saved $1,051,814 to retire at 55 years old. This is based on the median earnings of Americans according to the Bureau of Labor Statistics' October 2023 Current Population Survey in weekly earnings.

What of households over 55 have $0 saved for retirement?

Almost half (48%) of U.S. households headed by someone 55 or older have no retirement savings, according to U.S. Government Accountability Office's most recent estimates.

What are the rules for retiring at 55?

What Is the Rule of 55? Under the terms of this rule, you can withdraw funds from your current job's 401(k) or 403(b) plan with no 10% tax penalty if you leave that job in or after the year you turn 55. (Qualified public safety workers can start even earlier, at 50.)

What is the 10 year rule for Social Security?

If you've worked and paid Social Security taxes for 10 years or more, you'll get a monthly benefit based on that work.

What is the least amount of money you need to retire?

Some experts say to have at least eight to 10 times your annual salary available to you once you enter retirement. Others say you need at least 65% to 80% of your pre-retirement income available to you each year. There are also general savings recommendations by age, and, finally, there's the 4% rule, too.

How do I retire if I don't own a house?

Renting may make sense if you're an empty nester, ready to downsize, or unsure where you'll spend your retirement years. You may want to move away for better weather or a lower cost of living for some years, but also be easily able to move closer to your family later on.

What is the average Social Security check?

Social Security offers a monthly benefit check to many kinds of recipients. As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.

What benefits do I get when I turn 55?

What is a good monthly retirement income?

As a result, an oft-stated rule of thumb suggests workers can base their retirement on a percentage of their current income. “Seventy to 80% of pre-retirement income is good to shoot for,” said Ben Bakkum, senior investment strategist with New York City financial firm Betterment, in an email.

What is the rule of 55?

The rule of 55 allows penalty-free withdrawals from a 401(k) and 403(b) if you leave a job during or after the calendar year you turn age 55. This is an exception to the IRS rule that levies a 10% penalty on withdrawals from employer-sponsored retirement plans before age 59½.

How many people retire with no savings?

Nearly 2 in 5 Retirees Have No Retirement Savings.

How many Americans live paycheck to paycheck?

A majority, 65%, say they live paycheck to paycheck, according to CNBC and SurveyMonkey's recent Your Money International Financial Security Survey, which polled 498 U.S. adults. That's a slight increase from last year's results, which found that 58% of Americans considered themselves to be living paycheck to paycheck.

How much money do most people have in the bank when they retire?

According to data from the Federal Reserve's most recent Survey of Consumer Finances, the average 65 to 74-year-old has a little over $426,000 saved. That's money that's specifically set aside in retirement accounts, including 401(k) plans and IRAs.

What are the disadvantages of retiring at 55?

Is there really a $16728 Social Security bonus?

There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount. However, there are ways to create your own bonus by maximizing the amount you're eligible to receive.

When my husband dies do I get his Social Security and mine?

In many cases, a surviving spouse can begin receiving 1 benefit at a reduced rate and allow the other benefit amount to increase. If you will also receive a pension based on work not covered by Social Security, such as government or foreign work, your Social Security benefits as a survivor may be affected.

Do married couples get 2 Social Security checks?

If you are married and you and your spouse have worked and earned enough credits individually, you will each get your own Social Security benefit.

How much do you need to retire with no bills?

10x your annual salary by 67

To fund an “above average” retirement lifestyle—where you spend 55% of your preretirement income—Fidelity recommends having 12 times your income saved at age 67, which is the normal Social Security retirement age.

How much money do you need to retire and never work again?

To account for this, experts suggest you multiply your desired retirement income by 25 times. So if you want to retire on $20,000 a year, you would need $500,000 saved to live comfortably and never have to work again. Retirement spending also depends on your lifestyle choices.

Is it better to rent or buy in your 50s?

After plugging in assumptions on investment returns, maintenance costs, home appreciation and other factors, the retiree would come out ahead financially by renting for less than five years. If the retiree plans to stay longer, buying would be a better choice.

Is it better to have your house paid off when you retire?

It may make sense to do so if you're retiring within the next few years and have the cash to pay off your mortgage, particularly if your money is in a low-interest savings account. Again, this works best for those who have a well-funded retirement account and enough reserve funds for unexpected emergencies.

Do most people retire without a mortgage?

The survey, "Retirement and Mortgages," by national mortgage banker American Financing, found 44 percent of Americans between the ages of 60 and 70 have a mortgage when they retire, and as many as 17 percent of those surveyed say they may never pay it off.