In June of 2022, inflation reached a staggering high of 9. 1%—the highest jump seen since the 1980s. Although the rate has since dropped, it remains above the 2% average that indicates price stability. As of January 2025, the rate sits at 3%, meaning Americans paychecks aren’t stretching as far for common consumer items. In short, it’s more expensive to pay for groceries, gas, and other necessities.
These are some of the categories hit hardest in January 2025, with percentages indicating year-over-year price changes:
Given the overall higher cost of goods, many people are cutting back on retirement savings. The New York Times reported an increase in the number of hardship withdrawals from 401(k) accounts in 2023. Ultimately, this has delayed retirement for many, with some saying it’s entirely out of reach.
Even if you haven’t needed to withdraw or pause your savings, inflation has likely impacted your retirement saving vehicles—different accounts weather inflation in different ways.
Every year, Social Security benefits are looked at and changed to reflect the cost of living. However, these changes have not always been seen as enough. The Senior Citizens League reported that seniors lost one-third of their buying power between 2000 and 2021. The League also noted that the cost of goods and services increased by 99. 3% between 2000 and 2020, while the Social Security COLA adjustments only rose by 53%.
Also keep in mind that if you wait until you are older to start getting Social Security, you will get more each month. When you take the earliest Social Security option, you dramatically reduce your monthly payout for the remainder of your life. Crunch the numbers to determine the difference between retiring at 60 with $800k or waiting until you’re 65, 66, 67, or later.
Pension plans are typically tied to several of your last years of salary rates. Your final benefit amount may be less if there is a period of high inflation in the last few years of your working life. This is because it was based on your salary before inflation. If high inflation hits after you retire, your payouts will be based on the salary you earned previous to inflation. It’s also important to note that private pensions often do not adjust for inflation at all—only state or local government plans.
So you’ve hit your early sixties with $800,000 in savings and you’re wondering if you can finally kiss the 9-to-5 goodbye. This is a question I get from readers all the time, and it’s one that deserves a thorough exploration. After all, retiring at 62—a full five years before traditional retirement age—is a dream for many Americans.
The Short Answer: Yes, But…
Yes, $800k provides a healthy nest egg that allows for annual withdrawals of around $60,000 or below, spanning 20 years If this is sufficient to cover your retirement lifestyle, then $800k gives you an adequate buffer
The full answer isn’t quite that easy, though, as with most things in personal finance. Whether $800,000 is enough depends on several key factors:
- Your expected living expenses
- How long you plan to live (sorry to be morbid!)
- Whether you’ll receive Social Security benefits
- Your investment strategy
- Healthcare costs before Medicare eligibility
- Inflation over the coming decades
- Tax implications of your withdrawals
Breaking Down the Numbers
Let’s get into the nitty-gritty. According to retirement planning experts, here’s how long $800k might last with different annual withdrawal amounts (assuming a 6% average annual return before taxes and a 22% tax rate)
| Annual Spending | Years It Will Last | Total Interest | Total Withdrawal | Total Taxes |
|---|---|---|---|---|
| $30,000 | Beyond 30 years | $1,777,587 | $900,000 | $391,070 |
| $40,000 | Beyond 30 years | $1,343,840 | $1,200,000 | $291,244 |
| $50,000 | 29 years | $869,747 | $1,450,000 | $191,347 |
| $60,000 | 20 years | $583,554 | $1,200,000 | $128,380 |
| $70,000 | 16 years | $444,590 | $1,120,000 | $97,808 |
Here you can see that if you only take out $60,000 a year, your $800,000 could last at least 20 years, which would get you to age 82. But since most of us will live longer, you might want to plan for 30 years of retirement.
The 4% Rule and Your Retirement
Many financial planners recommend following the “4% rule,” which suggests withdrawing 4% of your retirement savings in your first year of retirement, then adjusting that amount for inflation in subsequent years.
A 4% withdrawal in the first year would give you $32,000 if you had $800,000. Adding in the possibility of getting about $2,600 a month from Social Security ($31,200 a year), your total income in your first year of retirement would be around $63,200 before taxes.
Is that enough? Well, the Census Bureau says the median income for households with people 65 or older in 2022 was about $50,290, so you’d be making more than most!
Social Security: A Critical Piece of the Puzzle
If you retire at 62, you’ll be eligible for Social Security benefits, but there’s a catch: claiming at 62 means accepting a permanently reduced benefit compared to waiting until full retirement age (66-67 for most people now).
Let’s assume you’ll receive around $2,600 per month ($31,200 annually) from Social Security. This guaranteed, inflation-adjusted income provides a solid foundation for your retirement budget.
It’s worth noting, though, that there are projections suggesting Social Security benefits might be reduced by about 17% in 2035 unless Congress takes action. However, historically, adjustments have been made to keep the program viable, so don’t panic just yet.
Tax Considerations: Not All $800K is Created Equal
The tax treatment of your $800,000 nest egg will significantly impact how far it stretches. Here’s why the type of accounts holding your money matters:
- Traditional 401(k)/IRA (pre-tax): All withdrawals will be taxed as ordinary income, which can also cause your Social Security benefits to be taxed.
- Brokerage accounts (taxable): You’ll pay capital gains taxes on investment growth, but not on your principal.
- Roth IRA (after-tax): Qualified withdrawals are completely tax-free, and they won’t impact the taxation of your Social Security benefits.
Ideally, you’d have your savings spread across different account types to give you flexibility with withdrawals and tax management. This strategy, known as “asset location,” can be incredibly valuable in retirement.
Investment Strategy: Making Your Money Work Harder
How your money is invested will dramatically impact how long it lasts. For instance:
- Bank CDs: At current rates of about 5%, your $800k could generate $40,000 annually without touching the principal.
- 10-year Treasury Notes: Currently paying about 4% annually, giving you $32,000 in income without reducing principal.
- Stock investments: The S&P 500 has historically returned around 10% annually on average, but with significant year-to-year volatility.
- Fixed-income annuities: Some currently offer guaranteed payments of over 7% for life.
A diversified portfolio with a mix of stocks, bonds, and perhaps some annuities can provide both growth potential and stability. I generally recommend keeping at least 30-40% in stocks even at retirement age to help combat inflation over the long term.
Healthcare: The Wild Card
One of the biggest challenges of retiring at 62 is bridging the healthcare gap until Medicare eligibility at 65. Private health insurance for those in their early 60s can easily cost $1,000+ per month per person.
You’ll need to factor this significant expense into your budget for at least the first three years of retirement. Once on Medicare, your healthcare costs will likely decrease, but won’t disappear entirely.
Strategies to Strengthen Your Position
If you’re concerned about whether $800k is truly enough, here are some strategies to consider:
1. Delay retirement slightly
Working even just 1-2 more years can significantly boost your retirement security. With a 7% annual growth rate, your $800,000 would grow by about $56,000 in just one year.
2. Delay Social Security
If you can afford to wait until age 67 to claim benefits, your $2,600 monthly check would grow to approximately $3,380, a substantial 30% increase that lasts for life.
3. Reduce housing expenses
Housing typically accounts for over a third of retiree budgets. Downsizing or relocating to a lower-cost area can dramatically reduce expenses and stretch your savings.
4. Consider part-time work
Even earning $10,000-$15,000 annually from part-time work during your first few retirement years can significantly reduce pressure on your portfolio during the critical early years.
5. Optimize account withdrawals
Be strategic about which accounts you tap first. Generally, it’s best to spend down taxable accounts first, then pre-tax accounts, saving Roth accounts for last.
A Real-World Example
Let’s look at a hypothetical 62-year-old retiree named Sarah who has $800,000 saved and will receive $2,600 monthly from Social Security.
Sarah’s retirement budget might look something like this:
- Housing: $1,800/month (including property taxes, insurance, maintenance)
- Healthcare: $1,200/month (until Medicare eligibility)
- Food/groceries: $600/month
- Utilities: $350/month
- Transportation: $400/month
- Travel/leisure: $600/month
- Miscellaneous: $300/month
That’s about $5,250 monthly or $63,000 annually. With her combined retirement income of approximately $63,200, Sarah is cutting it very close. She might consider delaying retirement for a year or two, or finding ways to reduce her expenses.
The Bottom Line: Can You Retire at 62 With $800K?
In most cases, yes, you can retire at 62 with $800,000 saved, especially if you:
- Have modest spending needs
- Will receive a decent Social Security benefit
- Have a well-diversified investment portfolio
- Have a plan for healthcare costs before Medicare
- Are willing to be flexible with your spending if market conditions change
The key is being realistic about your expenses and having contingency plans in place. No retirement plan survives first contact with reality unchanged, so build in some flexibility.
Final Thoughts
I’ve seen clients retire comfortably on less than $800,000, and I’ve seen others struggle with more. The difference often comes down to lifestyle expectations, smart tax planning, and willingness to adjust spending based on market conditions.
Remember that retirement isn’t an all-or-nothing proposition. Many people find that a gradual transition—perhaps working part-time for a few years—provides both financial security and a smoother emotional adjustment to retirement life.
Whatever you decide, make sure to run the numbers carefully or consult with a financial advisor who can help you create a personalized retirement income plan. Your future self will thank you for the careful planning!
Have you already retired with a similar amount saved? What has your experience been like? Drop me a comment below and let’s learn from each other’s experiences.
How to Retire on $800K by Age
| Age | Income per year (without interest) | Interest (4%) | Income per year (with interest) |
|---|---|---|---|
| 50 | $29,629 | $1,185 | $30,814 |
| 55 | $36,363 | $1,454 | $37,817 |
| 60 | $47,058 | $1,882 | $48,940 |
| 65 | $66,666 | $2,666 | $69,332 |
| 70 | $114,285 | $4,571 | $118,856 |
## Frequently Asked Questions
Is $800k Enough to Retire on in 2024?
While $800,000 is a significant amount, it may or may not be enough for your retirement, depending on your lifestyle, location, and debts. It’s essential to invest your savings wisely. Consult with a Certified Financial Planner to ensure your investments align with your financial goals and risk tolerance.
First and foremost, you should make sure your money is wisely invested so you can reap high returns from it. Talk to a Certified Financial Planner about how to invest your savings in a way that fits your risk tolerance, financial goals, and time frame.
If your average annual return is between 10–12%, you could have $80,000 to $96,000 in annual income. However, in a slow year with an 8% return, you’d have only $64,000, potentially forcing you to dip into your principal.
Can I Retire Early At Age 62 With $800k Retirement Savings
FAQ
How long will $800,000 last in retirement?
Using the 4% rule, you could take $32,000 out of your $800,000 portfolio in your first year of retirement and then adjust for inflation. This strategy, which assumes a 50/50 stock-bond split with moderate returns, could preserve savings for about 30 years.
What is a good amount of money to retire with at 62?
But people who want to retire five years early, at age 62, should try to save 14 times their salary by then. 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.
Can a couple retire at 60 with $800,000?
Scott Jackson. With $800,000 in super at age 60, you’re doing better than most Australians — but is it enough to comfortably retire? The truth is: it can be, depending on your lifestyle, spending, and long-term planning.
Can two people retire on $800,000?
To split $800,000 between two people will need more careful planning and strategy, but it is possible, depending on where you live and other factors. If you are both in excellent health, that means you may live longer, so the funds would need to stretch for additional years.
Is $800K enough for retirement?
$800k can provide a strong foundation for retirement, but factors like your spending, lifestyle, and age will determine how long it lasts. If you plan on spending $60,000 or less annually in retirement, $800,000 will be more than enough. You can retire early, at age 50, with $800,000 if you budget and plan correctly.
How much income can a 62-year-old expect in retirement?
For example, a 62-year-old with $800,000 in savings and a monthly Social Security benefit of $2,600 can reasonably expect an annual income of $63,200 in retirement. Figuring out how much income you can expect to generate in retirement can be complicated but a financial advisor can help. Connect with a fiduciary advisor today.
Is $800000 enough to retire on?
Congratulations on all the hard work it took to get here—after so many years of financial planning and saving, it’s no wonder that you’re ready to start planning for retirement. $800,000 is enough to retire on in many parts of the US, but your savings can go a lot further—and allow you to live more luxuriously—in less costly locations.
How much is a spouse’s retirement benefit at full retirement age?
This example is based on an estimated monthly benefit of $1000 at full retirement age. Year of Birth 1. Months between age 62 and full retirement age 2. At Age 62 3. The retirement benefit is reduced by 4. The spouse’s benefit is reduced by 5. If you were born on January 1 st, you should refer to the previous year.
Where can I retire with a $80K income?
Consider Mexico, South America, and some parts of Asia if you seek a lower cost-of-living—$800,000 can go much farther and allow you to live more luxuriously in these locations. That said, there are still many places in the US where your $80,000 can allow you to retire comfortably.
How much money do you get if you retire at 65?
For example, if you retire at 65 and distribute the $800,000 evenly over 20 years, you would receive around $60,000 annually ($5,000 monthly). Assuming you file taxes as a single person, this income would place you in the 22% federal bracket plus applicable state taxes.