How Much Do You Need to Retire at Age 62?

Age 62 is the earliest you can begin collecting Social Security retirement benefits, making it a popular milestone for those eager to step away from full-time work. But retiring this early also means your savings will likely need to support you for two to three decades. To determine how much you’ll need to retire comfortably at 62, you’ll have to account for your lifestyle goals, healthcare costs, inflation and the timing of your benefit claims. A thoughtful plan that balances your income sources, spending needs and withdrawal strategy is essential for lasting financial security.

If you’re looking to retire, a financial advisor can help you develop a comprehensive plan.

How Much Do You Need to Retire at Age 62?

The amount you’ll need to retire at 62 depends on your personal expenses, anticipated income sources and life expectancy. 

A common rule of thumb for retirement planning is Fidelity’s 10x Rule, which dictates that you should have 10x your annual salary saved by age 67 (full retirement age for people born in 1960 and later). However, those looking to retire five years early at age 62 should aim to have 14x their salary saved by that time, according to Fidelity. So, for example, a person who earns $115,000 per year should have $1.61 million saved by age 62 if they were to follow the Fidelity guidance.  

Meanwhile, the 4% rule can help you estimate a sustainable withdrawal rate from your savings. This rule assumes your savings should last you for at least 30 years if you withdraw 4% in the first year, adjusting your withdrawals in each year thereafter for inflation. (Note that the creator of the 4% rule has since updated the withdrawal rate to 4.7%.)

Under this rule, if you retired with $1 million in savings, you would take out $40,000 in your first year of retirement. In the second year, if the rate of inflation was 3%, you’d withdraw $41,200.

Factoring in Social Security and Other Income Sources

Unlike those retiring at age 40 or 50, retirees who are 62 years old may have access to Social Security, pensions or annuities. These income sources reduce the amount they’ll need in personal savings. However, claiming Social Security at 62 results in reduced benefits compared to waiting until full retirement age or later.

For example, if your full retirement age is 67 and your expected monthly benefit is $2,000, taking benefits at 62 could reduce your payout by up to 30%. This would mean you would receive only $1,400 per month, instead of the full $2,000. This lower amount may mean you need to rely more heavily on personal savings and investment returns.

On the other hand, additional income sources like rental properties, dividends or part-time work can supplement savings and help stretch retirement funds further. 

What to Consider When Retiring at 62

Retiring at 62 brings several unique considerations that can affect long-term financial security. Understanding the following factors can help retirees plan accordingly.

Healthcare and Medicare Eligibility

One of the biggest challenges to retiring at 62 is covering healthcare costs before becoming eligible for Medicare at age 65. Without employer-sponsored health insurance, retirees must explore options like:

• Purchasing a plan through the Affordable Care Act marketplace, which may have high premiums
• Using a health savings account (HSA) to cover medical expenses tax-free
• Seeking part-time work with employer health benefits to bridge the gap

Healthcare costs can be significant, so planning ahead is crucial to avoid unexpected medical expenses. For example, a 65-year-old who retired in 2025 can expect to spend approximately $172,500 on healthcare over the remainder of their life, according to estimates from Fidelity. ¹  

When to Take Social Security Benefits

As discussed above, it is possible to claim Social Security benefits at age 62. That said, waiting until full retirement age at 67 or even age 70 can result in significantly higher monthly payments. Retirees should weigh their options carefully, keeping in mind the following:

• Claiming early at age 62 results in permanently reduced benefits
• Waiting until full retirement age at 67 provides 100% of benefits
• Delaying until age 70 increases monthly benefits by 8% per year

For those with other income sources in the meantime, delaying Social Security can provide greater financial security later in life.

Retirement Account Withdrawals and Required Minimum Distributions

Retirees should consider how and when to withdraw money from 401(k) plans, IRAs and taxable accounts to optimize their retirement income. Since required minimum distributions (RMDs) begin at age 73 (age 75 for people born in 1960 or later), developing a tax-efficient withdrawal plan can help minimize tax liabilities.

Strategies such as Roth IRA conversions and withdrawal sequencing can help retirees keep more of their money while reducing taxes on withdrawals. A Roth IRA conversion requires paying taxes on the converted amount in the year of the conversion. Afterward, the funds grow tax-free, and if you meet certain conditions, you can withdraw them tax-free as well.

Withdrawal sequencing refers to strategically withdrawing funds in a way that maximizes the growth of tax-advantaged accounts while optimizing after-tax income.

Use SmartAsset’s RMD Calculator to estimate how much you’ll need to withdraw each year once RMDs begin and plan your withdrawals with confidence.

Lifespan and Long-Term Financial Planning

Since many retirees at 62 will need their savings to last for 25 to 30 years or more, ensuring that funds do not run out is a key concern. Important considerations include:

• Keeping a portion of investments in stocks to provide long-term growth
• Adjusting withdrawal rates based on market conditions
• Planning for inflation and rising living costs over time
• Maintaining an emergency fund for unexpected expenses

How to Budget to Retire at 62

Budgeting for retirement at 62 requires having a strategic plan that balances savings, expenses and investment withdrawals. Since early retirees must cover living costs for several decades, careful planning is necessary to avoid depleting funds too quickly.

Assess Your Expenses and Lifestyle

Understanding your monthly and annual expenses is the first step in determining how much you need to retire. Common expenses include:

• Housing, including mortgage and rent payments, as well as property taxes
• Healthcare and insurance premiums
• Food, transportation and entertainment
• Travel, hobbies and leisure activities
• Taxes on retirement withdrawals and Social Security benefits

Reducing expenses by downsizing, relocating to a lower-cost area or eliminating debt can help stretch retirement savings further.

Maximize Retirement Savings and Investments

A diversified portfolio can generate steady income while managing risk. Some strategies include: 

• Investing in dividend-paying stocks and bonds to generate passive income
• Maintaining a mix of stocks and fixed-income assets to balance growth and stability
• Utilizing annuities or real estate investments to create additional income streams

Retirees should also consider tax-efficient withdrawal strategies. This can include tactics like drawing from taxable accounts first while delaying Social Security or Roth IRA withdrawals to maximize benefits.

How to Bridge the Gap Between 62 and Medicare at 65

Retiring at 62 can create a three-year gap before Medicare eligibility begins at 65. For many early retirees, health insurance becomes one of the largest expenses during this period. This makes advance planning just as important as saving for retirement itself.

Many retirees turn to the Affordable Care Act marketplace for coverage. Unlike employer-sponsored plans, the cost of this coverage is closely tied to your household income, which creates opportunities for tax planning. The way you draw income from retirement accounts, taxable investments and cash savings can influence premium costs. As such, it’s possible to partly manage healthcare expenses through careful withdrawal strategies.

Some workers choose to continue their employer coverage through COBRA after leaving a job. While this allows you to keep the same doctors, network and benefits for a limited period, it often comes with a much higher price tag. Rather than sharing the expense with your employer as you once were, you assume the full cost of the coverage.

For married couples, a spouse’s workplace health plan can sometimes provide the simplest solution. If one spouse continues working, adding the retiring spouse to that employer-sponsored plan may offer broader coverage and lower costs than purchasing an individual policy.

Others bridge the gap through part-time work. Certain employers extend health benefits to workers who do not maintain a full-time schedule, allowing retirees to supplement income while reducing healthcare expenses. Even modest earnings can help offset insurance costs and reduce the need to tap retirement savings.

Health savings accounts can also play an important role. Funds accumulated in an HSA can be used for qualified medical expenses without triggering taxes. This offers a dedicated source of money for healthcare costs during the years before Medicare begins.

Bottom Line

Retiring at 62 is an achievable goal, but one that requires careful financial planning to ensure long-term stability. The amount necessary to do so depends on personal expenses, Social Security benefits and investment income. Some may rely on Social Security and pensions, while others will need well-structured savings and investment strategies to sustain their income.

Retirement Planning Tips

• Working with a financial advisor can help pre-retirees develop a customized plan, optimize their savings and create a strategy to ensure financial security throughout retirement. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• How much money do you need to retire at 62, and how much do you expect to have by then? These are important questions to contemplate and ultimately answer as you plan for your golden years. SmartAsset’s retirement calculator can help you estimate how much retirement income you’ll need to support your living expenses and help you track your progress.

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