What is the minimum age for early retirement
You can withdraw from CPP as early as 60. However, by doing so, you will permanently reduce the payments. The reduction is calculated based on average life expectancies. If you live for an average amount of time, that means you'll receive approximately the same total amount (after inflation adjustments) whether you start pulling from CPP at 60, 65, or even delay your pension later. People may have pensions through systems other than CPP. This is often true for big business or government work. They may work differently. People who retire at 55 with a pension are not getting their pension through CPP. A person retiring at 55 would need to wait at least five years to draw from the CPP, and ten years before he or she was eligible for a full pension through CPP. Canada also offers Old Age Security (OAS). This is only available once you are 65 years old or older, though this is changing. Starting in 2023, this will gradually change to 67 years or older. See this page for more details. As always, it's worth pointing out that the CPP and OAS will almost certainly not cover your full retirement expenses and you will need supplementary funds.
In Australia anyone thinking about retirement should be concentrating on superannuation. Contribution is compulsory (I think the current minimum contribution rate is 9.5% of salary) and both contributions and investment returns are very tax efficient. The Government site is quite comprehensive - http://www.australia.gov.au/topics/economy-money-and-tax/superannuation - have a read and come back with any specific questions. It's important to have both long term goals and milestones along the way. In an article I wrote about saving 15% of one's income, I offered the following table:  This table shows savings starting at age 20 (young, I know, so shift 2 years out) and ending at 60 with 18-1/2 year's of income saved due to investment returns. The 18-1/2 results in 74% of one's income replaced at retirement if we follow the 4% rule. One can adjust this number, assuming Social Security will replace 30%, and that spending will go down in retirement, you might need to save less than this shows. What's important is that as a starting point, it shows 2X income saved by age 30. Perhaps 1X is more reasonable. You are at just over .5X and proposing to spend nearly half of that on a single purchase.  Financial independence means to somehow create an income you can live on without the need to work. There are many ways to do it, but it usually starts with a high saving rate. Your numbers suggest a good income now, but maybe this is only recently, else you'd have over $200K in the bank.  I suggest you read all you can about investments and the types of retirement accounts, including 401(k) (if you have that available to you), IRA, and Roth IRA. The details you offer don't allow me to get much more specific than this. "For allocation, there's rules of thumb. 120-age is the percentage some folks recommend for stock market (high risk) allocation.  With the balance in bonds, and a bit of international fund to add some more diversity.  However, everyone needs to determine how much risk they're willing to take, and what their horizon is. Once you figure out your allocation, determine how much of your surplus goes into investing, and how much goes into short term savings for your short term financial goals such as purchasing a home. I would highly recommend reading about ""Financial Independence, Retire Early"" (FIRE).  Most of the articles I've seen on it were folks in the US, with the odd Canadian and Brit, but the principles should be able to work in the Netherlands with adjustment.   The idea behind FIRE is that you adjust your lifestyle to minimize expenses and save as much of your income as possible.  When the growth of your savings is > the amount you spend on a yearly basis, you've reached financial independence and can retire any time you wish. CD ladder is a good idea for your emergency fund, but CDs (at least in the US) usually pay around the same rate as inflation, give or take.  A ladder would help you preserve your emergency fund." Here's another answer on the topic: Saving for retirement: How much is enough? An angle on it this question made me think of: a good approach here is to focus on savings rate (which you can control) rather than the final number (which you can't, plus it will fluctuate with the markets and make you nervous). For example, focus on saving at least 10% of your income annually (15% is much safer).  If you focus on the final number: The way it works in the real world is that you save as much as you can, but there are lots of random factors and unknowns. Some people end up having to work a lot longer than they hoped to. Others end up able to retire early. Others retire on time but have to spend less than they hoped. But the one thing you can often control (as long as you have an income and no catastrophes, anyway) is that you spend less than you make. I think the chances of them changing the rules without grandfathering in people of retirement age (pun intended) are pretty small. The general rule of thumb on this issue seems to be to wait to get the full amount if you have sufficient resources that you don't expect to need the money earlier.  That is, unless you have some reason to not expect much longevity (family history of dying young, current medical condition, etc.) Ultimately, however, this is a big financial decision that is best made with the help of a good financial adviser/actuary. There are a large number of variables to be considered. There are two different ages, one where you can start withdrawing from the account, and a higher age where you must start withdrawing (at a minimum rate).  The withdrawals are treated like regular income, so they get taxed according to the same rates, and with the same deductions, as a salary. I have had pension programs with two companies.  The first told you what your benefit would be if you retired at age X with Y years of service. Each year of service got you a percentage of your final years salary. There was a different formula for early retirement, and there was an offset for social security. They were responsible for putting enough money away each year to meet their obligations. Just before I left they did add a new feature. You could get the funds in the account in a lump sum when you left. If you left early you got the money in the account. If you left at retirement age you got the money that was needed to produce the benefit you were promised. Which was based on current interest rates. The second company had a plan where they published the funding formula. You knew with every quarterly statement how much was in your account, and what interest it had earned, and what benefit they estimated you would receive if you stayed until retirement age. This fund felt almost like a defined contribution, because the formula was published. If most people took the lump sum that was the only part that mattered. Both pension plans had a different set of formulas based on marriage status and survivor rules. The interest rates are important because they are used to determine how much money is needed to produce the promised monthly benefit. They are also used to determine how much they need to allocate each year to cover their obligations.  If you can't make the math work you need to keep contacting HR. You need to understand how much should be flowing into the account each month. "Your question is based on incorrect assumptions. Generally, there's no ""penalty"", per se, to make a withdrawal from your RRSP, even if you make a withdrawal earlier than retirement, however you define it. A precise meaning for ""retirement"" with respect to RRSPs is largely irrelevant.* Our U.S. neighbours have a 10% penalty on non-hardship early withdrawals (before age 59 &half;) from retirement accounts like the 401k and IRA. It's an additional measure designed to discourage early withdrawals, and raise more tax.  Yet, in Canada, there is no similar penalty. Individual investments inside your RRSP may have associated penalties, such as the dreaded ""deferred sales charge"" (DSC) of some back-end loaded mutual funds, or such as LSVCC funds that generated additional special tax credits that could get clawed back.  Yet, these early withdrawal penalties are distinct from the RRSP nature of your account.  Choose your investments carefully to avoid these kinds of surprises. Rather, an RRSP is a tax-deferred account, and it works like this:  The government allows you to claim a nice juicy tax deduction, which can reduce your income tax at your marginal rate in the year you make a contribution, or later if you should choose to defer the deduction. The resulting pre-tax money accumulated in your RRSP benefits from further tax deferral: assets can grow without attracting annual income tax on earned interest, dividends, or capital gains. You don't need to declare on your income tax return any of the income earned inside your RRSP, unlike a regular investment account. Here's the rub: Once you decide to withdraw money from your RRSP, the entire amount withdrawn is considered regular income in the year in which you make the withdrawal.  Thus, your withdrawals are subject to income tax, and yes, at your marginal rate.  This is always the case, whether before or after retirement. You mentioned two special programs: The Home Buyers' Plan (HBP), and the Lifelong Learning Plan (LLP).  Neither the HBP nor the LLP permit tax-free withdrawals.  Rather, each of these programs are special kinds of loans that you can borrow from your own RRSP. HBP and LLP loan money isn't taxed when you get it because you are required to pay it back, and you pay it back into your own RRSP: You always pay income tax at your marginal rate on your RRSP withdrawals.** * Above, I said a precise meaning for ""retirement"" with respect to RRSPs is largely irrelevant.  Yet, there are ages that matter:  By the end of the year in which you turn 71, you are required to convert your RRSP to a RRIF. It's similar, but you can no longer contribute, and you must withdraw a minimum amount each year. Other circumstances related to age may qualify for minor tax relief intended for retirees, such as the Age Amount or the Pension Income Credit.  Generally, such measures don't significantly change the fact that you pay income tax on RRSP withdrawals at your marginal rate – these measures raise the minimum you can take out without attracting tax, but most do nothing at the margin.** ** Exception: One might split eligible pension income with a spouse or common-law partner, which may reduce tax at the margin." You don't have to retire. But the US government and other national governments have programs that allow you to set aside money when you are young to be used when you are older.  To encourage you to do this, they reduce your taxes either now or when your are older. They also allow your employer to match your funds. In the US they have IRAs, 401Ks, and Social Security.  You are not required to stop working while tapping into these funds. Having a job and using these funds will impact your taxes, but your are not forbidden from doing both. Decades ago most retirement funds come from pensions and Social Security. Most people are going to reach their senior years without a pension, or with only a very small pension because they had one in one of their early jobs. So go ahead, gamble that you will not need to save for retirement. Then hope that decades later you were right about it, because you can't go back in time and fix your choice.  Some never save for retirement, either because they can't or they think they can't. Many that don't save end up working longer than they imagined. Some work everyday until they die, or are physically unable to work. Sometimes it is because they love the job, but often it is because they cannot afford to quit. Yes you can't simply withdraw your super until you are aged 60 (and that may go up slightly on Budget night 13/05/14). But you can roll it over into a SMSF where you decide where you invest your super funds. However, I would advise against you starting a SMSF at this early age with a very small super fund account. The Admin. and audit fees would eat your super account up in one year. It is recommended that you have at least $300,000 to $400,000 in super fund assets before starting a SMSF to make the fees competitive and efficient. Now if you are with a partner and start a SMSF together, then it is your combined funds that need to be over the $300K mark (a SMSF can have between 1 to 4 members). The cheapest fund I could find was First State Super. The fees are $52 + 0.64% per year (for the High Growth option). So for a balance of $1000 you would pay $58.40 or 5.84% per year. The High Growth Investment Option has returned 18.4% over the last year, 12.7% pa over the last 5 years, and 8.2% pa over the last 10 years (which includes the period covering the GFC). So even with a small balance of $1000 your super investment will still continue to grow. If you could slowly grow your super account to $2000 your fees would be $64.80 or 3.24%, and at $3000 balance your fees would be $71.20 or 2.37%. The great thing about super is the tax advantages. You may be complaining now about fees on a small balance, and yes you should try to minimise these fees, not only when you have a small balance but also when your balance is larger, but the tax advantages available through superannuation will really come into play when you are on a high income paying the tax at or near the highest marginal tax rate. Compare the top marginal tax rate (plus Medicare Levy) at 46.5% compared to the tax rate of 15% on super contributions and investment returns. And it gets better, when you retire and take a pension or lump sum from your super after age 60 you pay zero tax on the income stream or lump sum. and you also pay zero tax on any ongoing investment returns in your super. The benefits of superannuation are numerous, and the best way to reduce your fees for now is to find a fund with lowest fees, try to increase your balance so your percentage fees go down, and try to consolidate all your super funds into the one with the lowest fees, if you have more than one super fund. You can get an investment manager through firms like Fidelity or E*Trade to manage your account. It won't be someone dedicated exclusively to you, but you're in the range where they'd take you as a managed account customer. Another option would be to get a financial planner (CFP or something) help you to identify your needs and figure out what your investments portfolio should look like. This is not a whole lot of money, but is definitely enough to have an early retirement if managed and invested properly. I found that the Target Date funds for Vanguard have a lower minimum, only $1,000. They are spaced every 5 years from 2010 to 2060. They are available as: General Account, IRA, UGMA/UTMA and Education Saving Account. A person who always saves and appropriately invests 20% of their income can expect to have a secure retirement. If you start early enough, you don't need anything close to 20%. Now, there are many good reasons to save for things other than just retirement, of course. You say that you can save 80% of your income, and you expect most people could save at least 50% without problems. That's just unrealistic for most people. Taxes, rent (or mortgage payments), utilities, food, and other such mandatory expenses take far more than 50% of your income. Most people simply don't have the ability to save (or invest) 50% of their income. Or even 25% of their income. It depends on the vesting schedule and the likelihood you'll be there long enough to get any vesting. A typical 6 year schedule gets you 20% after 2 years. You already know you'll be there 1 year, so now you need to decide if you'll last 2 years. Unless you know for sure you won't last 2 years, you should take the match on the 4%. Suppose your retirement plan earns 10%. If you leave before 2 years, compared with your 18% you're only behind by 8% return. But if you last 2 years, you'd be making a 32% return on that same amount. After 3 years you'd make 54%, and up it goes from there until you hit a 120% return after 6 years. I'd take the match simply because you have a lot more to gain than you have to lose if you leave early. "Unless your 401(k) plan is particularly good (i.e. good fund choices with low fees), you probably want to contribute enough to get the maximum match from your employer, then contribute to an IRA through a low-cost brokerage like Vanguard or Fidelity, then contribute more to your 401(k). As JoeTaxpayer said, contributions to a Roth IRA can be withdrawn tax- and penalty-free, so they are useful for early retirement. But certainly use your 401(k) as well--the tax benefits almost certainly outweigh the difficulty in accessing your money. JB King's link listing ways to access retirement money before the traditional age is fairly exhaustive. One of the main ways you may want to consider that hasn't been highlighted yet is IRS section 72(t) i.e. substantially equal periodic payments (SEPP). With this rule you can withdraw early from retirement plans without penalties. You have a few different ways of calculating the withdrawal amount. The main risk is you have to keep withdrawing that amount for the greater of five years or until you reach age 59½. In your case this is is only 4-5 years, which isn't too bad. Finally, in addition to being able to withdraw from a Roth IRA tax- and penalty-free, you can do the same for Roth conversions, provided 5 years have passed. So after you leave a job, you can rollover 401(k) money to a traditional IRA, then convert to a Roth IRA (the caveat being you have to pay taxes on the amount as income at this point). But after 5 years you can access the money without penalty, and no taxes since they've already been paid. This is commonly called a ""Roth conversion ladder""."