Robert A. Di Ieso, Jr.
By Donna Rosato
August 21, 2015

Q: I’m married, and we are in our early to mid-50s with just under $700,000 in savings. My husband makes around $55,000 a year, and I make $135,000 a year. We would really like to retire before 65 (our full retirement age for Social Security is 67). I have a pension that will pay out $1,132 a month with a 50% survivor’s benefit for my husband. But we’re not sure whether we can pull it off. I max out my 401(k) but never seem to have any extra money to put into savings. How we can get to where we want to be? – Elizabeth, Lisle, Illinois

A: Achieving your dream of early retirement may be doable. But you’ll need to step up your savings and control your expenses, says Ray Lucas, senior vice president of planning at of Integrated Financial Partners. “It all comes down to the lifestyle you want to lead,” says Lucas.

First, let’s take a look at where you are now. If you are saving the max amount of $18,000 annually in your 401(k)—not including catch-up contributions, which we’ll get to in a moment—that’s 13% of your salary or 10% of your combined incomes. If you continue saving at that rate and get a 6% annual rate of return, you’d have about $1.1 million in five years at age 60.

That sounds like a tidy sum, but it may not go as far as you think over a long retirement. Let’s assume you want to replace 75% of your pre-retirement income, which would come to $140,000. It helps that you have a pension that will give you $13,000 a year. And there’s also Social Security—the average annual benefit for a couple who claim at full retirement age is $25,000 a year. But to provide an additional $100,000 in annual income, you will need to save at least $3 million. Assuming a 3.5% withdrawal rate, that portfolio would likely last you until age 95, or 35 years.

Even if you wait till 65 to retire, you are on track to amass “only” $1.6 million. So you will need to dramatically boost your savings rate to meet those goals, says Lucas. That may be tough since you say you are already have trouble putting away more.

But even if you can’t reach those savings targets, you may be able to enjoy a comfortable lifestyle on less than a six-figure income—most people do. In which case an early retirement is still very possible.

The first step is to analyze your retirement spending needs. Start by completing an expenses worksheet such as this one, which covers everything from your mortgage and property taxes to eating out and buying groceries. Be sure to factor in health care costs too. You can’t enroll in Medicare till you’re 65, so if you retire earlier, you will need to buy private health insurance for a few years. Also take into account whether you will be helping anyone else out financially, such as children or an elderly parent.

Next, make a full assessment of all your sources of income. Use a retirement calculator to see how much income your savings and pension will provide based on the year you want to retire. And be sure to consider the best possible claiming strategies for Social Security—married couples often have more options for taking Social Security, such as file-and-suspend, which can boost their income. The Social Security calculator available online at Financial Engines will run thousands of scenarios to help you identify the best choices.

And even though you may find it difficult, look at ways to increase your savings. In your 50s, you can make catch-up contributions to your 401(k), which can raise your total savings to $24,000 a year. Be sure to jump on opportunities to do bursts of savings—socking away big chunks of money when large expenses fall away, such as paying for college for your kids. And practice now for retirement by living on a smaller budget, which will enable you to sock away more.

If none of this gets you closer to your goals, consider working another year or two or taking on a part-time job after you retire. Another smart move may be to downsize to a smaller home or relocate to a lower-cost area, which will enable you to build your portfolio—plus, the lifestyle will be easier on your budget after you stop working.

“Retiring early often means making trade-offs, now and later,” says Lucas. “But with smart planning and disciplined saving, you can make it a reality.”

Want to fast-track your retirement savings? Check out MONEY’s Ultimate Retirement Guide

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