Am I On Track to Retire Early? How to Find Out

Nearly half of workers have never worked out what they'll need each month in retirement. EBRI's 2025 Retirement Confidence Survey found only 52% have made that estimate, so the other 48% are guessing. (Source: EBRI/Greenwald Retirement Confidence Survey 2025, Fact Sheet 3.) If you're asking "am I on track to retire early?", the honest answer starts there. You can't measure progress toward a target you haven't set.

Here's the short version. You're on track if your savings, combined with what you plan to spend, keep you funded in most realistic futures. Not in an average future. In most of them. This guide covers how to check that, which risks early retirees tend to miss, and what to change if the answer isn't what you hoped.

The short answer: on track is a probability

Most articles on this topic give you a checklist. Paid off debt? Emergency fund? Feel ready? Those are useful questions, but none of them tells you whether your money will last.

A better question: out of many possible futures, in how many does your money run out before you do?

That's how planners frame it, and that's how the research frames it. Morningstar's 2025 research puts the safe starting withdrawal rate at 3.9% for a 30-year retirement. "Safe" means the money was still there in 90% of simulated outcomes. It does not mean the money lasted under an average return. (Source: Morningstar, The State of Retirement Income 2025, Dec 2025.)

So "on track" isn't yes or no. It's a percentage, and you decide how high that percentage needs to be before you feel comfortable.

Step 1: Start with spending, not savings

Every solid approach starts at the same place: what you'll actually spend. Fox Business and Kiplinger both put spending first, and the savings target follows from it.

Use your real spending, not a hopeful one. Pull 12 months of bank and card statements and add them up. Then adjust for retirement:

• Costs that stop: commuting, retirement contributions, possibly a mortgage.
• Costs that start or grow: health insurance, travel, hobbies, help around the house later on.
• Lumpy costs: a new car, a roof, helping family. Average them into a monthly figure.

That monthly number matters more than anything else in the plan. Get it roughly right and everything after it gets easier.

Step 2: Turn spending into a savings target

The best-known shortcut is the "FIRE number" (FIRE stands for Financial Independence, Retire Early): annual spending × 25. It's the 4% rule turned upside down, and the 4% rule comes from the 1998 Trinity study of historical returns. (CNBC)

That same CNBC piece quotes a financial planner calling the 4% rule a "terrible idea" for early retirement. The reason is simple. The rule was built for a 30-year retirement. If you stop work at 55 and plan to live past 90, your money has to last longer than that.

Here's the math with Morningstar's 3.9% figure:

Illustrative arithmetic only. Social Security, pensions, and other income would reduce what your savings have to cover.

Keep in mind that 3.9% is already tied to a 30-year retirement. A longer retirement generally means a lower safe starting rate, and so a bigger target. The earlier you retire, the more the shortcut flatters you.

Why age-based benchmarks don't fit early retirees

You've probably seen the savings-by-age charts. The common version, based on Fidelity's guidelines, says to have 1x your salary saved by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. (Clark.com)

These targets assume you save 15% of income starting at 25 and retire at 67. If you want out at 58, they don't apply. They also measure you against your salary, not your spending, and spending is what your savings actually pay for.

Benchmarks are a rough gut check. For early retirement, look at two things instead: what you spend, and how many years the money has to last.

Am I on track to retire early? Test it against 1,000 futures

This is where a Monte Carlo simulation comes in. The name sounds technical. The idea isn't.

Monte Carlo, in plain terms: instead of assuming the market returns, say, 7% every year, the simulation runs your plan through many possible sequences of good years, bad years, and ordinary years. Then it counts how many of those futures leave you with money at the end.

If your plan survives 870 of 1,000 futures, your success rate is 87%. That isn't a promise. It means that across a wide range of plausible markets, your plan held up most of the time.

What counts as "good enough"? One retirement stress-test checklist suggests aiming for at least 85% success. (AdvisorGuide) Morningstar's withdrawal research uses a 90% bar. Where you land depends on how flexible you can be if things go badly.

One caveat. Monte Carlo can overstate safety, because random draws ignore how markets sometimes stay poor for a decade at a time. That's why a historical test makes a useful second opinion. (Minafi)

The three gaps early retirees underestimate

1. Living longer than you planned

Social Security's own planning guidance says about one in three 65-year-olds may live to at least 90. (Source: Social Security Administration, Retirement Information for Medicare Beneficiaries, 2026.) A plan that ends at 85 quietly bets against a third of retirees. If you retire early, plan for a long life, not an average one.

2. Health care, before and after 65

Medicare doesn't start until 65. Retire before then and you have to pay for coverage on your own during the gap, a cost Fox Business and WRAL both point to as a key test of early-retirement readiness.

Costs don't disappear after 65 either. Fidelity estimates a 65-year-old retiring in 2025 will spend $172,500 on Medicare premiums, deductibles, and prescriptions over retirement, and that figure doesn't include long-term care. (Source: Fidelity Investments, 2025 Retiree Health Care Cost Estimate, Jul 2025.) Treat it as its own line in your budget.

3. The bridge years before other income starts

Social Security can't start before 62. Penalty-free withdrawals from most retirement accounts generally start at 59½. If you stop work earlier, your taxable savings carry the whole load until those other sources kick in. Plan the bridge year by year. One combined average can hide a gap.

Stress-test the first five years

The order of returns matters as much as the average. A crash in your first few years of retirement does more damage than the same crash 15 years in, because you're selling investments while they're down to pay the bills. This is called sequence-of-returns risk, and it's often described as the biggest risk of very early retirement. (Million Dollar Journey)

A practical test: run your plan as though you retired right before a bad stretch, like 1973–74 or 2000–02, and see whether it survives. (AdvisorGuide) If it only works when the first few years go well, it isn't on track yet.

Not on track? These are the changes that help

A low success rate isn't a verdict. It's a starting point. You have more control than it might feel like:

Try changing one at a time and see which moves your success rate most. For some people, one extra working year matters more than five years of extra saving. For others, trimming spending a little does the job.

Re-check every year

"Am I on track?" isn't a question you answer once. Markets move, spending changes, health changes. Re-run your numbers every year, and again after any big event: a market drop, an inheritance, a job change, a diagnosis. The goal isn't certainty. It's knowing where you stand, early enough to adjust.

Get your own answer

You can start with three numbers: your age, what you've saved for retirement, and what you spend each month. Monte Climb runs them through 1,000 simulated futures and gives you a success rate, with the plan running to age 95 by default so longevity is built in. It runs in your browser, and nothing is saved until you say so. If you want to dig deeper, you can ask William, our AI planner, follow-up questions like "Am I on track?" or "Can I retire at 62?"

It's planning software, not advice. It gives you a probability, not a promise, and that's still far better than guessing.

Show my answer →

Frequently asked questions

How do I know if I'm on track to retire early?

Work out your realistic annual spending in retirement, then test your savings against it across many simulated market futures. If your money lasts in most of them (one stress-test checklist suggests at least 85%), you're broadly on track. Re-check every year.

Is the 4% rule safe for early retirement?

It was built for a 30-year retirement, based on the 1998 Trinity study. Morningstar's 2025 research puts the safe starting rate at 3.9% for 30 years. Longer retirements generally call for a lower starting rate, so early retirees often need more than 25 times their annual spending.

What is a good Monte Carlo success rate for retirement?

There's no universal number. One retirement stress-test checklist suggests aiming for at least 85%, and Morningstar's withdrawal research uses a 90% threshold. The more willing you are to cut spending in bad years, the lower a rate you may be comfortable with.

Do savings-by-age benchmarks apply if I want to retire early?

Not really. Common benchmarks like 10x salary by 67 assume you save 15% from age 25 and retire at 67. Early retirees should base their target on spending and on how many years the money has to last.

What costs do early retirees most often underestimate?

Health insurance before Medicare starts at 65, health care after 65 (Fidelity estimates $172,500 for a 65-year-old in 2025, not counting long-term care), the bridge years before Social Security can start at 62, and living into their 90s.