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Pondering if you can retire early? Here's a reality check

Nearly three out of 10 workers expect to retire before they're 65. Unfortunately, many Americans are financially unprepared to retire at all.
/ Source: CNBC
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When should you retire

April 16, 201501:03

If you're in your late 40s or 50s, you may be wondering if there is a way to retire early.

Nearly three out of 10 workers expect to retire before they're 65, according the Employee Benefit Research Institute. Unfortunately, many Americans are financially unprepared to retire at all.

A new survey finds 40 percent of baby boomers have nothing saved for retirement and 21 percent have less than $100,000 saved.

You don't want to just leave your retirement date to chance. Want to retire before your late 60s? Ramping up your savings is the first critical step. Then consider these three variables that could also impact when you'll be able to retire.

Your life expectancy

One of the biggest risks to retirement is outliving your money.

Even if you may think you want to retire early, if you expect to live longer and you're healthy, research shows you're likely to work longer. The later you retire, the less money you will need in your nest egg.

You can use Living to 100's Life Expectancy Calculator, which incorporates findings from the New England Centenarian Study of centenarians and their families around world, to do your own projections.

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Your health

Health problems can have a big influence on your decision to retire early.

One analysis, using data from the National Institute on Aging's Health and Retirement Study, suggests poor health is a stronger influence than financial variables on someone's decisions to retire.

More than one-third of those 55 to 59 years old cite poor health as being very important in their decision to retire, but it is less of a consideration among those 60 and older.

Your income needs

Estimate how much income you'll get in retirement from all available sources, including Social Security, pensions, 401(k)s, IRAs, other retirement accounts and your savings. Will your cost of living be more or less than it is now? How long would that income allow you to maintain your lifestyle in retirement?

Having pension assets can certainly help you retire early. The NIA's study found that people with defined-benefit plans, such as traditional pensions, retire on average 1.3 years earlier than those with defined-contribution plans, such as 401(k)s.

If you have no pension, savings from retirement accounts, such as 401(k)s and IRAs, will likely be essential to helping you reach your early retirement goal. So save the maximum amount you can throughout your career to help you get there.