Allison Schrager, Columnist

Tempted to Retire Early? Consider Two Critical Factors

Inflation and interest rates will determine how much of your savings you'll actually be able to spend.

May 14, 2021 at 12:00 PM UTC

Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.”

That retirement cruise may need to wait a little longer.
Photographer: Tim Boyle/Bloomberg

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After a year of human deprivation, no travel and endless Zoom calls it’s no wonder many Baby Boomers are thinking of taking an early retirement to make the most of the time they have left. Data from Pew Research Center estimates 3.2 million more people retired last year than the year before. A survey from the New York Fed also indicates Americans are looking to leave the labor force earlier than they’d previously planned.

It’s not just pandemic fatigue driving people to retire. The stock market is up almost 30% from the start of 2020. So if you had a number in your head, an account balance that you needed to reach before you retire — maybe $200,000, $500,000 or $1,000,000 — rising markets mean you got there earlier than you thought.