‘I want to be able to stop working by 50 – how I'm planning to retire early'

Retiring early is usually the preserve of the very wealthy or those who have invested and saved heavily.

But with rising living costs, stopping work sooner than your expected retirement age could be challenging for many workers.

The average retirement age in the UK is 65 years for men and 64 years for women. Yet having financial freedom earlier is on the minds of many, it would seem. Around one in six people (16%) hope to retire before they turn 60, according to research by Hargreaves Lansdown in April 2025.

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MoneyWeek spoke to one reader who told how, at age 30, he plans to stop working before he is 50 and how he is doing it.

James Goodwin, who works for a small telecoms business in Leeds, is pumping up his ISA and investing more to get there.

“I’ve been investing in my ISA for five years already and I’m keen to reach a point where I have the choice not to work,” says James. “I might well carry on working when I get there, but it’s all about reaching that stage where you can choose.”

James, who lives in York with his wife Huiqiong, 33, says they both save as much as possible each month to put into their investments. In some years, he’s used his full £20,000 ISA allowance, but has reduced stocks and shares ISA contributions this year to build up a larger cash reserve.

Now they intend to invest around £10,000 to £20,000 per year.

“I spend a lot of spare time – even when I’m on holiday – researching our investments,” he says. “I would say I’m a value investor so I look for where a company’s share price is low compared to its intrinsic or true value.”

James is building his portfolio with UK stocks, including financial and hospitality companies.

He’s got his eye on a couple of investment trusts next. “The idea is to spend the next 15 years or so ploughing money into investments, and hope that they will yield enough to cover our living expenses to allow me to stop working. I realise there will be times when we can’t save as much, perhaps if children come along, but we will continue to save what we can.”

James, who writes an investment newsletter on his website firmreturns.com, pays into his company pension but has chosen to invest spare savings in an ISA held with AJ Bell so he’s not restricted on when he can use it to draw an income.

“When the time comes that I am financially comfortable enough to retire, I’d like to be a full-time investor – and maybe even seed my own fund, which wouldn’t feel like work,” he says.

Much of James’s success when it comes to retiring early will be selecting the right investments that will help him reach his goal.

Once he gets there, James dreams of a “fairly low-key” lifestyle – spending time reading, writing, hiking and socialising. “My wife would probably add some travelling to that list,” he adds.

The couple have had to make some sacrifices along the way. They could afford a larger house, but they chose a “smaller" one to keep housing expenses down, James says.

The couple also sold their car last year. Although it was convenient, they couldn’t justify the expense for the amount they drove.

Holidays abroad have also been put on hold – they only travel internationally to visit relatives, "where the largest cost is the flight tickets,” James says.

Cutting back on these higher expenses has meant the couple can continue to enjoy small luxuries in life – such as occasional meals out and trips to the cinema – without having to compromise on the amount they are saving.

If you want to start investing, we explain how to invest in our beginner’s guide.

How much do you need to retire early?

“The key to early retirement is building up enough money to ensure you have the lifestyle you want to enjoy,” says Alistair McQueen, head of savings and retirement at Aviva. “Though that number is different for everyone.

“You’ll also need to make sure that money will last. After all, even if you retire at 55 you could need to fund 30 years or more of retirement.”

Only half (48%) of mid-retirees aged 65-75 are confident they are on track to make their private pension savings last for life, recent research by Aviva and Age UK has found.

The latest Retirement Living Standards report from Pensions UK (previously the Pensions and Lifetime Savings Association or PLSA) estimates that a single person now needs £43,900 a year in post-tax spending – equating to more than £52,000 in gross income – to enjoy a “comfortable” retirement.

According to calculations by Fidelity, someone starting at age 25 would need to save £459 each month to reach that goal by 65.

Delaying contributions significantly increases the challenge: a 35-year-old would need to save £841 monthly, while a 45-year-old would need £1,703 a month – almost four times the commitment required at 25.

Ed Monk, associate director at Fidelity International, says: “Many people are taking positive steps towards improving their retirement prospects – whether that’s increasing contributions or planning to retire early. But intention alone isn’t enough. With the cost of retirement rising and expectations shifting, it’s vital that savers understand what kind of lifestyle their savings can realistically support.

“The PLSA’s updated benchmarks provide a useful reference point, and there are clear steps investors can take – whether they’re 10 years away from retirement or making final decisions – to ensure their savings align with the lifestyle they want in later life.”

If you do give up work, there’s always the option to change your mind and rejoin the workforce to start earning again.

“After the pandemic there was a surge of under 65s quitting their jobs, but many of these have returned to work as they realised that either they needed to go back to work financially, or for a strong daily sense of purpose,” says McQueen.

How to retire early

Here are some ideas on how to build wealth to increase your chances of financial freedom early.

Start investing early

The earlier you invest, the more time your money has a chance to grow.

You might not feel that retirement is a priority when you start the world of work, but your future self will thank you if you think long-term from the beginning.

Pay down your mortgage

Not having a mortgage to pay will be a big contributor as to whether you can afford to stop working. Repayments would be a large outgoing from your retirement savings.

You might consider using the 25% tax-free lump sum from your pension to pay off the remainder of your mortgage if that will cover it. But if you retire before you can access your pension then that won’t be an option for a while.

Max out pensions

Valuable tax breaks offered by pensions mean you can boost your retirement savings.

If you’re a basic rate taxpayer, every pound you pay in becomes £1.25, while for higher rate taxpayers it becomes £1.66.

The more money you can spare to pay in, the bigger your final pension pot will be. The earlier you invest, the more time your money has to grow. Find out from your employer if you can increase pension payments beyond the current level set and if they are matched by your employer, as this will boost your pension further.

While you can’t access money saved in a pension until 55 (rising to 57 in 2028) it’s still worth taking full advantage of the valuable pension tax relief. Remember, your fifties is still early retirement for most.

Build non-pension assets

While pensions are an extremely tax-efficient way of building wealth, they can’t be accessed until 55.

Should you want to stop work earlier, you would need non-pension assets, such as ISAs or buy-to-let property, to support your lifestyle until you can access your retirement pot and eventually your state pension.

The state pension age is currently 66 years old for both men and women but will start gradually increasing again from 6 May 2026.

Seek advice

If you need help with planning an early retirement you can speak to a financial adviser who can help map out a plan using cash flow modelling. This is a tool where you can understand if you have enough money to meet your retirement goals, testing different scenarios.

McQueen adds: “Retiring is one of the most important financial decisions you will make and not one to be rushed so getting help can allow you to consider all the variables at play including how long you might live, any social care you might need and any inheritance aspirations you have to leave money for loved ones when you’re gone.”

Find an adviser in your area at unbiased.com.

If you’re over 55, Pension Wise is a free and impartial government service that helps you understand the options for your pension pot.