Can You Retire After Working for 10 Years?

Retiring after just a decade of work might sound like a pipe dream, but with careful planning and smart financial choices, it may be within reach. Let’s explore how you can retire after 10 years of work and discuss the key factors and strategies that can help you make it happen. If you need additional guidance while planning for retirement, consider speaking with a financial advisor.

How Much Money You Need to Retire

How much you need to retire after 10 years of work depends on your personal circumstances—living costs, healthcare and lifestyle goals. Here are three common ways to figure out your magic number:

Estimate Your Life Expectancy

The first step is to get a sense of how many years – or decades in your case – your retirement will last. In other words, how long do you expect to live? Various factors influence life expectancy, including genetics, lifestyle choices and access to healthcare. While it’s impossible to predict with absolute certainty, you can use online tools and your health profile to make an informed estimate..

For example, the Social Security Administration (SSA) has an online life expectancy calculator that can be a valuable resource when planning for a decades-long retirement. A 32-year-old woman who’s ready to retire after just 10 years in the workforce could expect to live until almost 86, according to the SSA’s estimates. That means her plan would need to sustain her for approximately 54 years!

Project Your Expenses

From there, you’ll need to create a comprehensive budget that includes all potential expenses. These can include housing and utilities, as well as leisure activities and unexpected medical costs. Be realistic in your projections, and don’t forget to account for inflation.

Your lifestyle in retirement will shape your spending needs, so it’s important to consider how you plan to live. Will you downsize, travel extensively or pursue hobbies? Understanding your retirement goals is crucial in determining how much money you’ll need.

Plan for Healthcare Costs

Healthcare can be costly if you retire before Medicare eligibility at 65. If you’re retiring at 32, like the woman in our example above, you’ll need to find another way to pay for medical care for more than three decades. Investigate options like health savings accounts (HSAs), private insurance plans or employer-sponsored coverage from part-time jobs to bridge the gap.

How to Calculate Estimated Income in Retirement

A young retiree goes for a walk with his father.

To estimate your income in retirement, sum up the potential income from sources like Social Security benefits, pensions, investments and savings, and then deduct your expected expenses.

Start by determining your expected Social Security benefits. You can create an account on the SSA’s website to access your estimated benefits based on your work history. Remember, you can collect Social Security starting at age 62 but you won’t be eligible for full retirement benefits until age 66 or 67, depending on your birth year.

If you have a pension plan through your employer, contact your plan administrator to get a projection of your monthly pension payments in retirement. Then assess your savings and investments, including 401(k)s, IRAs and other accounts. You’ll need to figure out how much money you can withdraw from these accounts and how often without depleting your accounts. This is where a financial advisor can help.

If you’re considering annuities, research different types and get quotes from insurance companies. Annuities can provide a steady stream of income during retirement and supplement your Social Security benefits and pension payments.

Lastly, factor in any income you may earn from part-time work or other sources during retirement.

Experts typically recommend having enough income to replace between 70 and 90% of your pre-retirement earnings. For example, if you were earning $100,000 before retirement, aim to generate between $70,000 and $90,000 from the sources above.

Once you estimate your income and how long it will last, you can assess whether it’s enough to support your retirement. If not, you could consider cutting back on your expenses or working longer to save up more.

How Social Security Is Calculated

When considering retirement after just 10 years in the workforce, you’ll need to understand how early retirement affects your future Social Security benefits. The SSA takes into account your 35 highest-earning years to calculate your benefits. If you’ve only worked for 10 years, the calculation will include 25 non-working years, which will count as zeros and dramatically cut down your benefits.

Then again, if you’re in a financial position to retire after just 10 years, there’s a good chance that reduced Social Security benefits won’t make or break your retirement plan.

How to Retire in 10 Years

Retiring early, within a decade, might seem like an ambitious goal, but it’s attainable with careful planning and disciplined financial strategies. These five key steps can help you realize your dream of early retirement.

1. Save Aggressively

The foundation of early retirement is saving a significant portion of your income. Start by creating a realistic budget that allocates a substantial portion toward your savings. Aim to save at least 50% of your income, if possible. Increase this number when possible — bonuses, raises and tax refunds should go directly to savings. Automate contributions to investment and retirement accounts, and track your monthly savings rate to stay on target.

2. Live Frugally

Cut unnecessary expenses and rethink lifestyle inflation. This doesn’t mean depriving yourself, but focusing on value. Cook at home most nights, negotiate recurring bills, and shop secondhand. Track your spending categories monthly and challenge yourself to reduce one major expense each quarter — such as housing, transportation, or subscriptions. Redirect those savings toward investment or debt reduction.

3. Invest Wisely

Investing is crucial for building wealth over time. Diversify your investment portfolio to spread risk. Consider a mix of stocks, bonds, real estate and other assets. Take advantage of tax-advantaged accounts like IRAs and 401(k)s. Regularly review and adjust your investment strategy as your retirement date approaches.

4. Side Income

Boost your savings by generating additional income streams. This could include freelance work, a part-time job, or a side business. Invest time in developing skills that can be monetized, such as writing, graphic design or coding.

5. Eliminate Debt

High-interest debt can derail your early retirement plans. Prioritize paying off credit cards, personal loans and other high-interest debts. Avoid taking on new consumer debt and consider refinancing or consolidating when it reduces interest or shortens the payoff term. Once these are cleared, redirect the money you were using for debt payments into your savings and investments.

Tips for Increasing Retirement Income If You Start Working Late

A newly retired woman drinks a coffee while she enjoys the view of a city.

If you started working later in life and are behind schedule on retirement planning, here are four common strategies to save more money and boost your retirement income:

Delay Retirement

One of the most effective ways to increase your retirement income is to delay your retirement age. By working a few years longer, you allow your savings to grow while reducing the number of years that you’ll rely on your retirement funds. Additionally, delaying retirement may also increase your Social Security benefits.

Catch-up Contributions

If you’re 50 or older, take advantage of catch-up contributions to IRAs and 401(k)s let you exceed standard limits and grow your nest egg faster before retirement. For example, in 2025, the IRS allows individuals to save an extra $7,500 in a 401(k) or similar workplace account and an extra $1,000 in an IRA. Plus, if you’re between 60 and 63, you can boost your catch-up contribution to $11,250 and save up to $34,750 in a 401(k) or similar account.

Downsize

Consider downsizing your home or making other lifestyle adjustments. Moving to a smaller, more affordable home can free up extra cash that you can redirect these funds into your retirement savings. Evaluate your budget and identify areas where you can cut expenses.

Work Part-Time

Transitioning to part-time work during your retirement years can provide a dual benefit. You continue to earn income while allowing your retirement savings to grow untouched. Part-time work can also provide a sense of purpose and keep you mentally and socially engaged.

Bottom Line

The challenge of retiring after just a decade of work may seem daunting but is not insurmountable. It demands aggressive saving, investing strategically, understanding the impacts on Social Security and effective planning for healthcare costs. With careful planning and professional financial advice, you can brave the uniquely rewarding adventure of early retirement and head toward a secure financial future.

Retirement Planning Tips

A financial advisor can help you develop a retirement income plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Figuring out how much money you’ll need to retire is a key component of the planning process. SmartAsset’s retirement calculator can help you estimate how you may need and assess your progress so far.