Retire 5 years earlier (or more) by making 1 simple change in 2026. You probably have fewer days in good health than you think

This is both good and bad news. The bad news is that the aging process will eventually reduce the list of activities you can indulge in, naturally limiting discretionary spending. The good news is that this creates an opportunity to reimagine your retirement budget and potentially retire earlier than you’d planned, depending on your savings and income sources.

Here’s how a fresh perspective on retirement spending can help you rethink your retirement timeline.

Understanding the health clock

According to the Social Security Administration’s (SSA) actuarial tables, a typical 65-year-old man can expect to live about 17.5 additional years, while a woman of the same age can expect roughly 20 additional years, based on recent period life tables (1).

However, it’s important to understand that this reflects average life expectancy. Not all of these years are equal, and lifestyle is likely to change significantly from your 60s to your 80s and beyond. A long-haul, overnight flight to Australia, for instance, sounds much more appealing at 65 than 85.

In other words, retirement is often described as unfolding in “go-go years,” “slow-go” and “no-go” years. Many retirees find that their most active years occur in the first decade or so after leaving full-time work.

According to the World Health Organization (WHO), average healthy life expectancy in the U.S. is in the low-to-mid 60s. This means many people live several years with some health limitations (2).

Simply put, if you retire at 65, you’re already past your peak physical years.

This impacts your budget as well. If you’re taking fewer flights, cruises and hikes in your 80s, you’re also spending far less money. Although healthcare costs generally increase with age, Medicare eligibility begins at 65 for most Americans, which can reduce out-of-pocket insurance costs compared with pre-65 coverage (3).

With this broader perspective, you could potentially find some savings that unlock an early retirement.

Unlocking early retirement

Recognizing the slower pace of spending in your 80s and 90s could potentially unlock an earlier retirement in your 60s.

Consider a typical professional who wants to retire at age 65 and expects to spend $60,000 a year. Assuming a 25-year life expectancy and steady annual expenses, she believes she needs $1.5 million to retire, based on the standard 4% rule.

That seven-figure target is more of a psychological barrier. For many Americans, it’s likely to be too high a bar and could compel them to spend several extra years at work.

However, if this professional reconfigures her budget to spend $60,000 a year in her 60s, $50,000 in her 70s and $40,000 in her 80s, her target may move lower. Using the 4% rule as a general guide, an average annual withdrawal need of about $50,000 would imply a portfolio of roughly $1.25 million.