You are too young to retire

By Mark Seed, myownadvisor

Special to Financial Independence Hub

Inspiration for this post arrived from attending a few retirement parties of late with work colleagues, another one as recently as yesterday and a few more to attend this spring.

Is age 50 too young to retire?

What about age 55? Age 60?

After talking to some work colleagues who submitted their retirement letters and who are now moving on, I know their ages. The celebration yesterday was for someone in their early 60s. They talked and yearned about more time at their cottage, doing small home reno projects, and leaving early morning Microsoft Teams calls in the rearview mirror.

They also talked about their desire to retire now since they “had enough” both mentally and financially: support from the latter after working with their financial advisor or planner and doing some retirement math on their own to bridge the gap between spending needs now and when their pension benefits would kick in, at age 65, including their firm intention to take CPP and OAS at that age too.

Although I’m leaping to lots of assumptions here, this makes me believe that the personal retirement savings of some work colleagues (the sum of RRSPs, TFSAs, non-registered investments or other assets) is likely small to modest beyond a workplace pension: in that they needed to work to ensure they were not sacrificing their personal portfolio too much, too soon. I get that. After decades of raising a family, buying a cottage, paying down a mortgage or two along with other expenses I’m sure, it seems my colleague was more than ready to permanently slow down; cut the cord from work and enjoy their time more while they still have decent health. Good on them. 🙂

This individual is however not the first person to mention the following to me:

“Oh, I can’t afford to retire yet but thinking age 63 or so should be fine since that’s when I can get my full OAS and decent CPP income.”

And my work colleague is hardly alone …

In looking at some stats (Source: StatsCan) the average age of retirement is hardly for anyone in their 50s:

These are also not easy times to retire…

Rising general inflation, uncertain tax rates, and higher healthcare costs could very well impact many retirees at any age. Myself included. Certainly, starting to save for retirement early and often and getting out of debt faster than most would be enablers – and I hope they have been for us.

You are too young to retire – is early retirement right for you?

Although many Canadians seem to expect to retire between the ages of 60 and 70 above, there is absolutely no hard and fast rules about when you need or must stop working of course.

Your retirement timeline will depend on many factors, I’ve highlighted some milestone ideas below:

3-5 Years Before Retirement

This is where dreams might start becoming a reality. I was there. I wrote about the emotional side of early retirement back in 2021 as my own evidence.

Somewhere between 3-5 years before retirement, it’s probably wise to get some retirement details in order. Accuracy isn’t overly important IMO but the process of planning is. 

I recall focusing on our desired lifestyle and spending habits to go with it: what early retirement or semi-retirement or full retirement might look like:

• We started estimating our retirement spending levels, our income sources, and inflation factors.
• We started evaluating our portfolio returns over the last 5- or 10-years.
• We looked seriously at our sustainable cashflow from our portfolio (passive dividend and distribution income since we’d be too young to accept any workplace pension or any CPP or OAS government benefits).
• We started tracking our spending in more detail to challenge those spending assumptions.

1-2 Years Before Retirement

As recently as early 2024 for us, things got more serious.

You might recall we became mortgage and debt-free almost 18 months ago.

You might also recall we realized our financial independence milestone last summer. 

In the year or so leading up to any big decisions, more detailed planning kicked into higher gear:

• We spent more time as a couple talking about how to put some travel dreams into reality – multi-week vacations in the coming years away from icy/cold Ottawa winters.
• While we continue to use some professional tools to help our retirement income planning work (I can help you too!!) we used some retirement income planning rules of thumb to test our assumptions (and we passed). 🙂

• We started to explore ways at work to test some semi-retirement assumptions; the desire but also the financial flexibility to work part-time vs. full-time (i.e., could we still make ends meet).
• We started to look into post-retirement healthcare insurance options, where needed.
• We started to talk about our purpose (if not working at all) – what would we do with our time?
• We started to position our portfolio for upcoming withdrawals.

< 1 Year To Go Before Retirement

Although we might be in this timeline, not sure, since part-time work is now occurring with our solid employer (this could continue for both of us??) but this is where the real retirement countdown calendar probably begins for most people…as you strike full-time working days off your calendar:

• Look to finalize your portfolio income strategy – what income is coming from where and when.
• Keep a cash buffer and finalize your bucket approach for retirement income to avoid some poor sequence of returns risks.
• Finalize post-retirement healthcare insurance.

• For fun, put a retirement countdown timer somewhere!
• Start planning your time when you are not working – see previous points above!
• With a few months to go, be kind and fair to your employer, pick a firm retirement date and support your co-workers with any transition plan.
• Begin focusing on your life beyond work in preparation for semi-retirement or retirement.
• Make any final “important” purchases and pay those off to remain debt-free (while you still have your workplace income and/or benefits).

Wrap-up

Once again, while many Canadians expect to retire after age 60, there is nothing written in stone to suggest you cannot adjust your life-work balance much sooner than most.

That’s always been our plan and we’re living that now.

Here are some other factors to consider too:

• Your health: Life is short and precious. How do you feel? Taking care of your physical and mental health is just as important as taking care of your financial health.
• Your professional motivation: Does your job still bring lots of personal satisfaction and happiness?
• Your social life: What passions do you have or rather have you put off outside of work? Is it time to make more time for those? Life is more than a paycheque.

I can’t speak for any retiree or aspiring retiree that reads this site but I can say with lots of conviction that I will personally enjoy the next few months as my transition to retirement continues.

Mark

Mark Seed is a passionate DIY investor who lives in Ottawa.  He invests in Canadian and U.S. dividend paying stocks and low-cost Exchange Traded Funds on his quest to own a $1 million portfolio for an early retirement. You can follow Mark’s insights and perspectives on investing, and much more, by visiting My Own Advisor. This blog originally appeared on his site on May 3, 2025 and is republished on Findependence Hub with his permission.