Forget waiting for Social Security and Medicare to kick in. You may be able to retire sooner than you think.
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Its possible to retire at 60, even though the average age for retirement is 62. Many Americans want to retire early or at the latest, by 60. If they lose their job, get sick, or their family situation changes, some people have no choice but to do it. For others, they are sick of working and are ready to start their next chapter. Either way, its not uncommon to retire before Social Security and Medicare kick in.
Cassandra Rupp, a senior wealth advisor at Vanguard, says that many people want to retire before they start getting Social Security and Medicare because they think they need to work longer but realize they don’t. “It opens up the conversation. ”.
When it comes to retiring at 60, there are two buckets you have to consider: financial and emotional. Not sure if you can pull it off? If you can answer these five questions, you may be on your way to retiring at 60.
Ever caught yourself daydreaming about saying goodbye to your office chair before you hit your late 60s? You’re not alone! The question “is retiring at 60 too early” has been on the minds of millions of Americans who are tired of the 9-to-5 grind and ready to start their next chapter
As someone who’s spent years helping friends navigate their retirement journeys I can tell you that retiring at 60 isn’t necessarily too early—but it definitely requires careful planning. Let’s dive into what you need to know if you’re considering an early exit from the workforce.
The Reality of Retiring at Age 60
According to recent retirement trends, the average retirement age in America hovers around 62. So retiring at 60 isn’t actually that far from the norm! However, it does mean you’ll be leaving the workforce before both Social Security full benefits (which typically start at 67 for most people) and Medicare (which kicks in at 65).
David Rae, a financial planner who has helped people retire for many years, says that a lot of people want to retire as soon as possible or at least by the time they are 60. But is it realistic? Let’s break it down.
How Much Money Do You Need to Retire at 60?
This is probably the biggest question on your mind, right? Here’s what the experts say:
- If you’re on track to retire at the full retirement age (67), you should have about 11 times your annual salary saved by age 60
- But if you want to retire AT 60, you’ll need approximately 17 times your annual salary saved up
- The average net worth of Americans between 55-64 is around $540,000—which may not be enough for many to retire comfortably at 60
That may sound like a lot, but remember the power of compound interest! As your portfolio grows, it grows even more without you adding anything. For instance, if you invest $5 million and earn $10 million, that’s a $5 million increase in one year!
The Pros and Cons of Retiring at 60
Pros of Retiring at 60
- You’re still young enough to enjoy an active retirement and tackle your bucket list
- You can avoid penalties on withdrawals from retirement accounts
- You may have more years to enjoy life outside of work
- You can potentially transition to part-time or passion work
Cons of Retiring at 60
- You’re not eligible for Social Security benefits yet (earliest is 62)
- Medicare doesn’t kick in until 65, so you’ll need to budget for healthcare
- Your retirement savings need to last longer (potentially 30+ years!)
- You may miss out on peak earning years (60-65)
5 Critical Questions to Ask Before Retiring at 60
Before you hand in that resignation letter, make sure you can answer “yes” to most of these questions:
1. Do you have a handle on your expenses?
You need to know EXACTLY what you’re spending now and what you’ll likely spend in retirement. Many experts recommend tracking your expenses for at least 6 months before retiring. Don’t forget about inflation—what costs $100 today might cost $150+ in 10 years!
2. Do you have a way to fund retirement before Social Security kicks in?
This is super important! You’ll need a plan to generate income between age 60 and when you start claiming Social Security (which could be 62 at the earliest, though waiting until 70 maximizes your benefits).
3. How will you pay for healthcare?
Without Medicare until 65, you’ll need to budget for healthcare coverage. The Affordable Care Act provides options, and there are subsidies available, but this can still be a significant expense.
4. What will you do with your free time?
This might seem silly, but trust me—it’s crucial! Many retirees struggle with the transition from a structured workday to complete freedom. Do you have hobbies, volunteer opportunities, or part-time work to keep you engaged?
5. Are you getting professional help?
Working with a fiduciary financial planner who specializes in retirement can make a huge difference in your success. They can help create a retirement roadmap and income strategy that works for YOUR specific situation.
Making Your Money Last When Retiring at 60
If you retire at age 60, your money might need to last up to 30 years! Here are some ideas to help it last longer:
The 4% Rule (With Caution)
You can take out about 4% of your retirement savings every year and still have a good chance of not running out of money and following the traditional rule of thumb. Let’s say you have $1 million saved. That’s about $40,000 a year.
BUT! Remember that retiring at 60 means your retirement could last longer than the 30 years this rule was designed for, so some financial experts suggest using a more conservative 3-3.5% withdrawal rate.
Maximize Tax Efficiency
Depending on which accounts you’re drawing income from, you’ll likely owe taxes on some or all of your withdrawals. Having a mix of account types can help:
- Traditional 401(k)/IRA: Taxed as ordinary income when withdrawn
- Roth IRA/Roth 401(k): Tax-free withdrawals (if requirements are met)
- Taxable investment accounts: Typically taxed at capital gains rates
Consider Catch-Up Contributions
If you’re approaching 60 and need to boost your savings, take advantage of catch-up contributions:
- For 2025, the catch-up contribution is an extra $7,500 on top of the standard $23,500 limit
- For those ages 60-63, the catch-up amount increases to $11,250!
That means you could potentially put away $31,000 or more in your 401(k) each year as you approach retirement age!
Real Talk: Who Should Consider Retiring at 60?
Retiring at 60 isn’t for everyone. It might be a good fit if:
- You’ve consistently saved and invested throughout your career
- You have paid off major debts including your mortgage
- You have a pension or other guaranteed income sources
- You have a clear plan for healthcare coverage before Medicare
- Your lifestyle expectations match your financial resources
On the flip side, you might want to reconsider if:
- You’re behind on retirement savings
- You have significant debt
- You have dependents who rely on your income
- You love your job and it gives you purpose
- You haven’t thought through how you’ll spend your time
My Personal Take
I’ll be honest with you—I’ve seen friends retire at 60 who are absolutely thriving, and others who regretted the decision. The difference wasn’t just about money (though that’s obviously important!). The happiest early retirees had a clear vision for their next chapter.
My friend Mark retired at 60 last year after saving aggressively for decades. He now splits his time between volunteering at a local animal shelter and teaching part-time at a community college. He says he’s never been happier! But he also spent years preparing financially AND emotionally for this transition.
Final Thoughts: Is 60 Too Early to Retire?
So, is retiring at 60 too early? The answer is: it depends on YOUR unique situation. It’s certainly not too early if you’ve planned properly, saved adequately, and have a strategy for healthcare and how you’ll spend your time.
Remember that retirement isn’t necessarily an all-or-nothing decision. Many people are embracing “partial retirement” where they leave their full-time career but work part-time or consult. This can provide both financial benefits and the structure that many retirees miss.
Whatever you decide, start planning NOW. The earlier you start saving and planning for retirement, the easier it will be to reach financial freedom—whether that’s at 60, 67, or any age in between!
Ready to See If You’re on Track?
Take our quick retirement readiness quiz to see if you’re prepared for retirement at 60:
- Do you have at least 11x your annual salary saved?
- Do you have a plan for healthcare coverage before Medicare?
- Have you calculated your expected monthly expenses in retirement?
- Do you have a strategy for when to claim Social Security?
- Have you spoken with a financial advisor about your specific situation?
The more “yes” answers, the closer you are to making that early retirement dream a reality!
Do you have a handle on your expenses?
Retiring at 60 sounds great, but to make it a reality, you have to ensure you can afford it. You’ll only know for sure if you know how much you plan to spend in retirement. “That will drive whether or not you can retire early,” says Nick Nefouse, global head of retirement solutions and head of LifePath at BlackRock.
Let’s say you have $1 million saved in your retirement account and spend about $50,000 a year. Not factoring in inflation, you will have spent $350,000 of that balance by age 67, when your full Social Security benefits kick in. That leaves you with about $650,000.
That may be a green light for you to retire at 60, but if you didnt know what your expenses were, you wouldn’t have realized you could pull the trigger early.
How will you pay for health care?
Health care is a big cost in retirement. According to Fidelity Investments, a 65-year-old retiring in 2024 could expect to spend an average of $165,000 in health care and medical expenses throughout retirement. That’s up close to 5% from 2023 and more than double from its inaugural estimate in 2002. That’s only expected to increase over the years.
Medicare pays for 80% of some of your health care needs, but it doesn’t start until you turn 65. If you retire at 60, that means you will have to self-fund your health care for five years. You won’t have your company’s subsidized insurance to rely on either.
Sure, there is the Consolidated Omnibus Budget Reconciliation Act, or COBRA insurance, which enables you to stay on your employer-provided health insurance for a period of time, typically between 18 and 36 months, but it tends to be expensive.
You could join your spouse’s insurance plan if he or she is still working, but if you are both retiring or you are single, you will have to find health insurance on your own.
“A lot of couples retire at the same time,” says Carson. “If there isn’t a spousal plan, go on the government website or go on the Kaiser Family Foundation health insurance marketplace calculator and see what subsidies you qualify for.”
When determining if you can afford to retire at 60, make sure to factor in health care into your annual budget and what impact it will have on your retirement savings over those five years before Medicare kicks in.
Why You Should Start Retirement at 60 (Before It’s Too Late)
FAQ
Is it worth it to retire at 60?
If you’re ready and financially secure, retiring at 60 could be ideal. But if you’re worried about savings or health care costs, you might want to work a few more years to get your finances in better shape.
Is retiring at 60 considered early retirement?
Yes, retiring at age 60 is generally considered early, as the traditional retirement age in the U. S. is often around 65, and the full Social Security retirement age is 66 or 67 for most people.
What percentage of 60 year olds are retired?
However, between 2016-2022, just 32% of US adults 60-64 and 70% of US adults 65-69 were retired.
What is the most beneficial age to retire?
67-70 – During this age range, your Social Security benefit, if you haven’t already taken it, will increase by 8% for each year you delay taking it until you ….
Should I retire early at age 60?
Of course, if you want to retire “early” at age 60, you will need to reach certain planning milestones earlier in life. If you can, you should try to keep living the way you did before you retired. To do that, you will need about 17 times your annual salary when you retire.
What is the retirement age for a 60 year old?
Even then, you’ll only receive partial benefits. For anyone born in 1960 or later, the full retirement age, when you are entitled to 100 percent of your monthly benefit, is 67. By claiming early at 62, the benefit amount is reduced by 30 percent.
What happens if you retire at 60?
Bonus points if you have a large Roth IRA or Roth 401 (k) that generates tax-free income. Retiring at 60 means you won’t yet be eligible to claim Social Security, which could put you in a financial bind, depending on how much you have saved for retirement and your ideal cost of living.
Is retirement age increasing?
Incorrectly Anticipating Retirement Age After a steady decrease over the previous 35 years, retirement age for men has been rising since 1996. The average age of retirement for women has been increasing since the early 1960’s.
Should you take social security if you retire too early?
Social Security often represents a significant portion of post-retirement income and individuals frequently compound the problem of retiring too early by also electing to take Social Security payments as soon as eligible (currently age 62).
Are there’spikes’ in retirement age data at 62 and 65?
There are “spikes” in the retirement age data at ages 62 and 65. Some psychologists argue that early Social Security eligibility at age 62 and perception of “normal” retirement age at 65 serve as reference points that influence peoples’ decisions to retire at these ages. (Knoll, 2011)