How Much Do You Need to Retire at Age 62?

Since age 62 is the earliest you can begin collecting Social Security retirement benefits, it’s 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, potentially longer than you spent in the workforce. 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 needed to retire at 62 depends on 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.

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.

The 4% rule also can be used to 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.

For instance, 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. The creator of the 4% rule has since updated it to 4.7%.

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, reducing the amount they 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%, meaning you would receive only $1,400 per month instead. This lower amount may require you 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

A couple holding hands while on a walk in the park.

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 2024 can expect to spend approximately $165,000 on healthcare over the remainder of their life, according to estimates from Fidelity.

When to Take Social Security Benefits

As discussed above, Social Security benefits can be claimed at age 62 but 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. Roth IRA conversion requires paying taxes on the converted amount in the year of the conversion. Afterward, the funds grow tax-free and can be withdrawn tax-free if specific conditions are met.

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.

Required Minimum Distribution (RMD) Calculator

Estimate your next RMD using your age, balance and expected returns.

Quickly estimate your RMDs and when to take them

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RMD Amount for 401(k) #1

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About This Calculator

This calculator estimates RMDs by dividing the user's prior year's Dec. 31 account balance by the IRS Distribution Period based on their age. Users can enter their birth year, prior-year balances and an expected annual return to estimate the timing and amount of future RMDs.

For IRAs (excluding Roth IRAs), users may combine balances and take the total RMD from one or more accounts. For 401(k)s and similar workplace plans*, RMDs must be calculated and taken separately from each account, so balances should be entered individually.

^*The IRS allows those with multiple 403(b) accounts to aggregate their balances and split their RMDs across these accounts.

Assumptions

This calculator assumes users have an RMD age of either 73 or 75. Users born between 1951 and 1959 are required to take their first RMD by April 1 of the year following their 73rd birthday. Users born in 1960 and later must take their first RMD by April 1 of the year following their 75th birthday.

This calculator uses the IRS Uniform Lifetime Table to estimate RMDs. This table generally applies to account owners age 73 or older whose spouse is either less than 10 years younger or not their sole primary beneficiary.

However, if a user's spouse is more than 10 years younger and is their sole primary beneficiary, the IRS Joint and Last Survivor Expectancy Table must be used instead. Likewise, if the user is the beneficiary of an inherited IRA or retirement account, RMDs must be calculated using the IRS Single Life Expectancy Table. In these cases, users will need to calculate their RMD manually or consult a finance professional.

For users already required to take an RMD for the current year, the calculator uses their account balance as of December 31 of the previous year to compute the RMD. For users who haven't yet reached RMD age, the calculator applies their expected annual rate of return to that same prior-year-end balance to project future balances, which are then used to estimate RMDs.

This RMD calculator uses the IRS Uniform Lifetime Table, but certain users may need to use a different IRS table depending on their beneficiary designation or marital status. It's the user's responsibility to confirm which table applies to their situation, and tables may be subject to change.

Actual results may vary based on individual circumstances, future account performance and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee future distribution amounts or account balances. Past performance is not indicative of future results.

SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.

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, such as drawing from taxable accounts first while delaying Social Security or Roth IRA withdrawals to maximize benefits.

Bottom Line

Retiring at 62 is an achievable goal, but one that requires careful financial planning to ensure long-term stability. The amount needed 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. Fortunately, SmartAsset’s retirement calculator can help you estimate how much retirement income you’ll need to support your living expenses and help you tract your progress.