How much do you need to save for retirement? Its one of the most common questions people have. And no wonder. There are so many imponderables: When will you retire? How much will you spend in retirement? And for how long?.
Thats why we did extensive analysis to come up with age-based retirement savings factors that can help you plan—in spite of those uncertainties. These milestones are aspirational. You likely wont meet all of them. But they can help you set savings goals that will allow you to live the way you want to in retirement.
Research suggests its a good idea to try to save at least 15% of your income annually, including any employer contribution.
A sustainable withdrawal rate is estimated to be no more than 4% to 5% yearly, with adjustments for inflation.
Our savings factors are based on the assumption that a person saves 15% of their annual income starting at age 25 (which includes any employer match), invests more than 20% of their savings over the course of their lifetime in stocks, retires at age 67, and plans to keep living the way they did before retirement (see footnote 1% for more details).
Based on those assumptions, we estimate that saving 10x (times) your preretirement income by age 67, together with other steps, should help ensure that you have enough income to maintain your current lifestyle in retirement. That 10x goal may seem ambitious. But you have many years to get there. To help you stay on track, we suggest these age-based milestones: Aim to save at least 1x your income by age 30, 3x by 40, 6x by 50, and 8x by 60. Your personal savings goal may be different based on various factors including 2 key ones described below. But these guidelines can provide a starting point to help your build your savings plan, and assess your progress. 2,3.
Are you dreaming of saying goodbye to your 9-to-5 earlier than most? Retiring at 60 can give you that perfect sweet spot of youth and freedom—but it takes serious financial planning to pull off. I’ve helped countless clients navigate this journey, and today I’m sharing everything you need to know about securing your financial future for an early retirement.
The Magic Number: What’s Your Retirement Price Tag?
Let’s cut to the chase—there’s no one-size-fits-all answer to how much you need to retire at 60. But I can give you some solid benchmarks to aim for.
Financial experts typically recommend having 11-17 times your annual salary saved by age 60 if you’re planning to retire then. So if you’re making $100,000 a year, you’re looking at needing between $1.1 million and $1.7 million in your retirement accounts.
But wait—why such a big range? Well your personal number depends on several key factors
- Your lifestyle expectations (champagne taste or beer budget?)
- Where you’ll live (Manhattan penthouse or rural cottage?)
- Your health status (marathon runner or dealing with chronic conditions?)
- Whether your mortgage will be paid off
- If you’ll have other income sources like rental properties
The Reality Check: Average Retirement Savings at 60
Let’s take a look at where most Americans are first. According to the Federal Reserve’s Survey of Consumer Finances, the average amount of money saved for retirement by Americans aged 55 to 64 is about $185,000.
That’s. not great. Especially since Fidelity says you should save about 8 times your yearly salary by age 60.
In fact, the gap between reality and recommendation is pretty stark:
- Over 20% of workers have less than $10,000 saved for retirement
- 29% have less than $25,000 saved
- The average net worth for Americans between 55 and 64 is around $540,000
If these numbers make you sweat, don’t panic—there’s still time to boost your savings if you’re not quite there yet.
The 4% Rule: A Simple Way to Calculate Your Number
One of the most common approaches to figuring out your retirement number is the 4% rule. Here’s how it works:
- Estimate how much annual income you’ll need in retirement
- Multiply that number by 25
So if you need $60,000 per year to live comfortably, you’d need about $1.5 million saved ($60,000 × 25 = $1,500,000).
According to this rule, you can take out 4% of your retirement savings in your first year of retirement. You should then adjust that amount for inflation every year after that, and there’s a good chance your money will last for decades.
The Special Challenges of Retiring at 60
Retiring at 60 comes with some unique challenges you need to plan for:
1. The Social Security Gap
You have to be at least 62 years old before you can start getting Social Security, and even then, your benefits will be cut. For maximum benefits, you’d need to wait until 70.
This means you’ll need extra savings to bridge the gap between retirement at 60 and when you start collecting Social Security.
2. The Healthcare Hurdle
Medicare doesn’t kick in until 65, leaving you with a 5-year gap where you’ll need to cover healthcare costs out of pocket or through private insurance, which can be EXPENSIVE.
According to research, private health insurance for early retirees can cost thousands per month. That’s a significant expense you need to factor into your retirement budget.
3. The Longevity Challenge
People are living longer than ever. If you retire at 60, your retirement savings might need to last 30+ years. That’s a long time to stretch your money!
Factors That Affect How Much You’ll Need
Let’s break down the major factors that will influence your personal retirement number:
Expected Lifestyle
Be honest with yourself—do you plan to travel extensively? Take up expensive hobbies? Or are you happy with a simpler lifestyle?
Your spending habits during retirement will have the biggest impact on how much you need to save. Some experts suggest planning to replace about 70-80% of your pre-retirement income.
Housing Situation
Will your mortgage be paid off? Do you plan to downsize? Move to a lower-cost area?
Those with paid-off mortgages typically need less income than those still making housing payments. This single factor can drastically change your retirement number.
Healthcare Costs
Even with Medicare after 65, healthcare can be a major expense. Long-term care isn’t fully covered by Medicare, and those costs can add up quickly.
Planning for potential healthcare costs is crucial, especially if you have a family history of health issues.
Inflation
Don’t forget about inflation! Even at a modest 2-3% annual rate, inflation can significantly erode your purchasing power over a 30-year retirement.
A dollar today won’t buy the same amount in 20 years, so your retirement planning needs to account for this.
Practical Steps to Reach Your Number
If you’re feeling a bit overwhelmed by the numbers, here are some concrete steps you can take to boost your retirement savings:
1. Maximize Catch-Up Contributions
Once you hit 50, the IRS lets you make “catch-up” contributions to your retirement accounts above the standard limits.
For 2025, you can contribute an extra $7,500 to your 401(k) on top of the $23,500 limit, for a total of $31,000. And if you’re between 60-63, that catch-up amount jumps to $11,250!
2. Reduce Current Expenses
Look for ways to trim your budget now so you can funnel more money into retirement accounts. Small changes can make a big difference over time.
Maybe you can:
- Cut subscription services you rarely use
- Refinance high-interest debt
- Optimize your tax strategy
3. Consider Working a Few Extra Years
Even working 2-3 years longer than planned can significantly improve your financial security by:
- Giving you more time to save
- Reducing the number of years your savings must support you
- Potentially increasing your Social Security benefits
4. Develop Multiple Income Streams
Side gigs, rental income, or part-time work can all boost your savings now and potentially continue into retirement, reducing pressure on your investment portfolio.
Sample Retirement Budget at 60
To give you a clearer picture, here’s what a comfortable retirement budget might look like for a couple retiring at 60 with $1.5 million saved:
Annual Expenses:
- Housing (property tax, insurance, maintenance): $15,000
- Healthcare (private insurance until 65): $24,000
- Utilities: $6,000
- Food: $12,000
- Transportation: $8,000
- Travel/Entertainment: $15,000
- Misc. expenses: $10,000
Total Annual Expenses: $90,000
Using the 4% rule, they could withdraw approximately $60,000 from their retirement accounts each year. The remaining $30,000 would need to come from other sources like part-time work or rental income until Social Security kicks in.
Tips for Retiring Comfortably at 60
Here are my top tips for making that early retirement dream a reality:
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Start planning early – The sooner you start, the more time compound interest has to work its magic.
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Pay off debt before retiring – Entering retirement debt-free gives you more flexibility and less stress.
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Create a detailed retirement budget – Know exactly what your expenses will be, including healthcare.
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Build a diversified income stream – Don’t rely solely on your 401(k). Look into Roth IRAs, taxable accounts, and possibly rental properties.
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Consider an annuity – These can provide a steady income stream that you can’t outlive, which can be valuable for early retirees.
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Have a plan for healthcare – Research your options for covering the gap between 60 and Medicare eligibility.
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Stay flexible – Be prepared to adjust your spending, or even work part-time if market conditions aren’t favorable early in your retirement.
Final Thoughts: Is Retiring at 60 Right for You?
Retiring at 60 is a fantastic goal, but it’s not for everyone. Before making the leap, ask yourself:
- Do I have enough saved to last potentially 30+ years?
- Have I planned for healthcare costs until Medicare eligibility?
- Am I emotionally ready to leave my career?
- Do I have a plan for how I’ll spend my time?
The decision to retire early is about more than just money—it’s about what will truly make you happy. Some people find that working longer, even part-time, provides structure and purpose they value.
We’ve covered a lot of ground here, but the most important thing to remember is that retirement planning is personal. Your number might be different from your neighbor’s, and that’s okay.
The key is to be realistic about your needs, plan carefully, and start taking action today. Whether you’re 30 or 55, every step you take toward building your retirement savings gets you closer to that comfortable retirement at 60 you’re dreaming of.
What retirement age are you aiming for? Drop a comment below with your thoughts or questions about early retirement planning!
How you want to live in retirement
In other words, do you think your costs will go down when you retire? If so, you’re living below the average life. Or will you spend as much as you do now? Thats average. If you expect your expenses will be more than they are now, thats above average.
Lets look at some hypothetical investors who are planning to retire at 67. Joe is planning to downsize and live frugally in retirement, so he expects his expenses to be lower. His savings factor might be closer to 8x than 10x. Elizabeth is planning to retire at age 67 and her goal is to maintain her lifestyle in retirement, so her savings factor is 10x. Sean sees retirement as an opportunity to travel extensively, so it may make sense for him to save more and plan for a higher level of retirement spending. His savings factor is 12x at age 67.
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Our simple widget lets you see the impact of these 2 variables—when you plan to retire and what kind of lifestyle you want to live in retirement—on how much you need to have saved when you do retire, and on all the intermediate milestones.
What to do if you’re behind? If you’re under 40, the easy answer is to save more and invest for growth through a variety of sources. Of course, stocks come with more ups and downs than bonds or cash, so you need to be comfortable with those risks. If you’re over 40, the answer may be a mix of saving more, spending less, and working longer if you can.
No matter what your age, focus on the goals ahead. Dont be discouraged if you arent at your nearest milestone—there are ways to catch up to future milestones through planning and saving. The key is to take action, and the earlier the better.
When you plan to retire
The age you plan to retire can have a big impact on the amount you need to save, and your milestones along the way. The longer you can postpone retirement, the lower your savings factor can be. Thats because delaying gives your savings a longer time to grow, youll have fewer years in retirement, and your Social Security benefit will be higher.
Consider some hypothetical examples (see graphic). Max plans to delay retirement until age 70, so he will need to have saved 8x his final income to sustain his preretirement lifestyle. Amy wants to retire at age 67, so she will need to have saved 10x her preretirement income. John plans to retire at age 65, so he would need to have saved at least 12x his preretirement income.
Of course, you cant always choose when you retire—health and job availability may be out of your control. But one thing is clear: Working longer will make it easier to reach your savings goals.
See footnote 1 at the end of the article for more information.
Retire at 60? Shocking Average Savings vs. The REAL Number You Need (Spoiler: It’s Different!)
FAQ
What is a good amount to retire on at 60?
To retire at age 60, a good rule of thumb is to have 8 to 10 times your annual salary saved by that age, but the actual amount needed varies significantly based on your lifestyle, health, debt, and other personal factors.
Is $1,000,000 enough to retire at 60?
Yes, you can potentially retire at 60 with $1 million, but it’s not guaranteed and depends heavily on your lifestyle, expenses, health care costs, and potential supplemental income sources like Social Security and pensions.
How much should a 60 year old have in retirement?
By age 60, you should have eight times your salary saved. By age 67, you should have 10 times your annual salary saved.
How much money do you need to retire with $100,000 a year income?
To retire with a $100,000 annual income, you likely need a nest egg of $2. 5 million, using the 4% withdrawal rule. However, this total decreases significantly if you also factor in Social Security and other retirement income, potentially requiring closer to $1. 9 million in savings.
How much money should I save if I retire at 60?
Most experts recommend that a couple save between seven and eight times their combined annual salary by age 60 in order to have a comfortable retirement. When you turn 60, you should have between $945,000 and $1,080,000 saved if you make a total of $135,000 a year. How much tax will I pay if I retire at 60?.
What if I plan to retire at 60?
If you plan to retire at 60, you’ll need a clear picture of your future expenses and a solid plan. Because 60 is earlier than most benefit eligibility ages, you’ll need extra savings to cover the gap. The amount needed varies significantly based on your lifestyle expectations, health considerations and location.
How much money do you need to retire comfortably?
How much you will need to retire comfortably will depend on your lifestyle and expenses. People who no longer have mortgages or pensions will need to take out less money from their other retirement accounts to make sure they have enough money as they age.
How much should you save if you’re behind in retirement?
Fidelity’s guideline: Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. The age you want to retire and the kind of life you want to live in retirement will affect your personal savings goal. If you’re behind, don’t fret. There are ways to catch up. The key is to take action.
Should I retire early at age 60?
Of course, if you are looking to retire “early” at age 60, you will need to reach retirement planning milestones at younger ages. If you want to maintain your pre-retirement lifestyle (which should be the goal if you can swing it), you will want to have about 17 times your annual salary at retirement age.
How much money can I take from my retirement account?
As a basic rule of thumb, you can use the 4% rule to estimate how much income you can take from your various retirement accounts, with pretty good odds of not running out of money. For example, if you had $1 million saved for retirement, you could pull out 4% or $40,000 per year.