How much money do I need to retire at 60?

Using a 3.75% safe withdrawal rate (appropriate for a 25-30 year retirement), you need about 26-27x your annual expenses. If you spend $60,000/year, that's roughly $1.6 million. Factor in $15,000-$20,000/year for healthcare before Medicare at 65. Social Security at 62 can supplement, but claiming early reduces your benefit permanently by up to 30%.

Should I take Social Security at 62 or wait?

It depends on your health, financial need, and marital status. Taking at 62 gives you a 30% smaller check forever, but you collect for 5 more years than if you waited until 67. The break-even point is around age 80 — if you live past 80, waiting pays off. For married couples, the higher earner should often delay to maximize survivor benefits. Use our Social Security Calculator for your specific numbers.

What about healthcare between 60 and 65?

This 5-year gap is shorter than the 55-retiree's gap but still significant. Options: ACA marketplace insurance (keep income low for subsidies), COBRA (up to 18 months from your employer), spouse's plan, health-sharing ministry, or part-time work with benefits. Budget $12,000-$20,000/year for a couple. The ACA prohibits age-based coverage denial, but premiums increase with age.

Should I take my pension as a lump sum or annuity?

Annuity provides guaranteed lifetime income — good if you lack investment discipline or want certainty. Lump sum gives you control and potential for growth, but you bear the investment risk. Consider: Do you have other guaranteed income (Social Security)? Is the annuity rate competitive? Do you have heirs you want to leave money to? Generally, if you can earn more than the pension's implied interest rate (typically 5-7%), the lump sum is mathematically better.

Can I access my 401(k) at 60 without penalty?

If you separated from your employer during or after the year you turned 55, you can access THAT employer's 401(k) penalty-free under the Rule of 55. By age 59.5, there is no early withdrawal penalty on any retirement account. So at 60, you have full access to all IRAs and 401(k)s without penalty. The key is the period from 60-59.5 for accounts not covered by the Rule of 55 — but you'll be past 59.5 already.

How does retiring at 60 affect my Social Security benefit?

Social Security benefits are based on your highest 35 years of earnings. If you retire at 60 and have fewer than 35 working years, zeros are averaged in, which lowers your benefit. If you already have 35+ years of earnings, retiring at 60 has minimal impact on your benefit calculation. However, your benefit will grow by 8% per year if you delay claiming past your Full Retirement Age (67 for most current workers).

What is the Medicare enrollment process?

Your Initial Enrollment Period for Medicare begins 3 months before the month you turn 65 and ends 3 months after. Part A (hospital insurance) is premium-free if you paid Medicare taxes for 40+ quarters. Part B (medical insurance) has a monthly premium (about $175/month in 2024). You'll also want Part D (drug coverage) and either a Medigap supplement or Medicare Advantage plan. Missing your enrollment window can result in permanent premium penalties.

How to Retire at 60

Retiring at 60 puts you in a sweet spot: just 2 years from Social Security, 5 years from Medicare, and past the 59.5 penalty-free threshold. But the timing decisions you make now — when to claim SS, how to bridge healthcare, pension choices — will affect every year of your retirement.

Can You Retire at 60?

Current Age

Must be under 60

Annual Expenses

In today's dollars (excluding healthcare)

Current Savings

All investment accounts combined

Monthly Contribution

How much you invest per month

Expected Return

7% is long-term stock market average

Est. SS Monthly Benefit (at FRA)

Check ssa.gov for your estimate

Social Security Claiming Age67

62 (-30%)67 (FRA)70 (+24%)

I have a pension

Portfolio Needed to Retire at 60

$1.52M

After accounting for SS ($2,000/mo at 67)

Projected at 60

$1.18M

In 15 years

Shortfall

$335.2K

Save $1,375/mo more

Social Security

$2,000/mo

At age 67 (0% bonus)

Healthcare Gap

$80.0K

Total cost ages 60-64

Monthly Retirement Income Breakdown

Portfolio withdrawals (3.75%)$3,702/mo

Social Security (starting at 67)$2,000/mo

Total Monthly Income$5,702/mo

Note: Social Security income starts at age 67. Before that, your portfolio must cover all expenses ($6,750/mo including healthcare).

Your Retirement Timeline: Age 60 to 72

Retiring at 60 means navigating several key milestones in your first 12 years. Each one changes your financial picture.

🎉

Retire

Begin retirement. Access 401(k) if separated from employer at 55+. Healthcare from ACA marketplace or COBRA.

📋

Social Security Eligible

Earliest claiming age. 30% permanent reduction if FRA is 67. Consider whether you truly need it.

🏥

Medicare Starts

Enroll in Medicare Parts A & B. Healthcare costs drop dramatically. Sign up 3 months before turning 65.

📊

Full Retirement Age

100% of your Social Security benefit if born 1960+. No earnings penalty for working.

🏆

Max Social Security

Maximum benefit — 124% of PIA. No additional benefit from waiting past 70.

💰

RMDs Begin

Required Minimum Distributions from traditional IRA/401(k) start. You must withdraw whether you need it or not.

Social Security: When to Claim

This is the single biggest financial decision most 60-year-old retirees face. The difference between claiming at 62 and 70 is a 76% larger monthly check — for life.

62-30%

Earliest you can claim. Permanent 30% reduction from FRA benefit.

Best for: Health concerns, immediate income need, short life expectancy

65-13.3%

Medicare starts. Still 2 years early for FRA (if born 1960+).

Best for: Moderate health, some other income sources

670%

Full Retirement Age for those born 1960+. 100% of your PIA.

Best for: Average health, balanced approach, some savings

Your current selection

70+24%

Maximum benefit. 8% bonus per year past FRA. No benefit to waiting past 70.

Best for: Good health, long life expectancy, spouse survivor benefit optimization

Pension: Lump Sum vs. Annuity

If you are lucky enough to have a pension, you likely face this choice: take a lump sum or receive monthly payments for life. This is a decision you cannot undo, so think carefully.

Take the Lump Sum If...

+ You are a disciplined investor
+ You have heirs you want to leave money to
+ The implied interest rate is below 5-6%
+ You worry about the company or pension fund solvency
+ You want flexibility and control

Take the Annuity If...

+ You want guaranteed income you cannot outlive
+ You lack investment confidence or discipline
+ You are in good health with longevity in your family
+ The pension is PBGC-insured
+ You value simplicity and peace of mind

Glen's Take

Retiring at 60 is the most financially achievable form of early retirement. You are past 59.5, so no penalty on retirement account withdrawals. You are only 2 years from Social Security and 5 from Medicare. The math is much friendlier than retiring at 55 or 50.

The biggest mistake I see people make at this stage is not understanding how Social Security timing affects their lifetime income. If you are in good health and have savings to bridge, delaying Social Security to 70 gives you 24% more than claiming at FRA and 76% more than claiming at 62. That is a massive difference over a 20-25 year retirement.

My unsolicited advice: if you can afford to wait until 70 for Social Security, do it. Live off your portfolio for the first 10 years, let SS grow, and then let the guaranteed income cover most of your basic expenses in your 70s and 80s. It is the closest thing to a free lunch in retirement planning.

Get Glen’s Updates

Investing insights, new tools, and whatever I’m building this week. Free. No spam.

Unsubscribe anytime. I respect your inbox more than Congress respects property rights.

Frequently Asked Questions

Recommended Resources

Tools & books I actually use and recommend

Interactive Brokers

Low commissions, global market access, and professional-grade tools. This is where I hold my positions.

Open an Account

A Random Walk Down Wall Street

Burton Malkiel's classic case for index investing. The book that convinced millions to stop stock-picking.

View on Amazon

The Intelligent Investor

Ben Graham's timeless guide to value investing. The book Warren Buffett calls "the best investing book ever written."