How Much Do I Need to Retire at 60?
A clear way to size your retirement number at 60: the 25x rule, the seven-year bridge to Social Security, and health insurance before Medicare.
The short answer: you need about 25 times the yearly spending your savings must cover, plus enough to bridge the years before Social Security starts. For most people retiring at 60, that bridge is the part they forget.
Below is a simple way to build your own number, in today’s dollars.
Start with what you’ll spend
Your retirement number grows from one figure: what you plan to spend each year. Use your current spending, then adjust for what changes:
- Goes away: retirement contributions, commuting, possibly a mortgage.
- Goes up: health insurance before Medicare, travel, hobbies.
- Taxes: withdrawals from traditional 401(k)s and IRAs are taxable income, so include the tax.
Many people land between 70% and 90% of their working-life spending. Your own budget beats any rule of thumb.
The 25x rule, and why 60 changes it
The classic guide is the 4% rule: withdraw 4% of your portfolio in year one, then raise the amount with inflation. Its mirror image is the 25x rule. Spending $40,000 a year from savings means you need $1,000,000.
At 60 you may need the money to last 35 years or more. Many planners use a slightly lower rate for longer retirements, 3.5% to 4%, which means 25 to 28.5 times your spending.
Add the bridge to Social Security
Social Security’s full retirement age is 67 for anyone born in 1960 or later. You can claim at 62, but your check is permanently cut by up to 30%. Waiting to 67, or even 70, pays more for life.
If you retire at 60 and claim at 67, your savings carry all of your spending for seven years and only the gap afterwards. A practical way to size it:
- Portfolio for life: (spending − Social Security) × 25
- Bridge: Social Security benefit × years until you claim
| Yearly spending | Social Security at 67 | Portfolio for life | Bridge (7 years) | Rough total at 60 |
|---|---|---|---|---|
| $40,000 | $20,000 | $500,000 | $140,000 | $640,000 |
| $60,000 | $24,000 | $900,000 | $168,000 | $1,068,000 |
| $80,000 | $30,000 | $1,250,000 | $210,000 | $1,460,000 |
All figures are in today’s dollars and use a 4% withdrawal rate. Your own estimated benefit is on your statement at ssa.gov.
Budget for health insurance until 65
Medicare starts at 65. From 60 to 65 most early retirees buy coverage on the ACA marketplace or use COBRA for the first 18 months. Premiums depend heavily on your reported income, which you can partly control by choosing which accounts you withdraw from. Put a realistic premium into your yearly spending before you calculate.
Getting to the money at 60
Age 60 is a good time to retire from an access point of view: the 10% early-withdrawal penalty on 401(k)s and IRAs ends at 59½. You’ll still owe income tax on traditional accounts, while qualified Roth withdrawals are tax-free.
Check your own numbers
- Use the retirement savings calculator to see what your savings and monthly investing grow to by 60.
- Use how long will my money last to test your spending against that balance.
- Run the plan through the Monte Carlo calculator to see how it holds up in bad markets.
The bridge years are where plans break. If your number looks tight, retiring at 62 instead of 60 removes two years of full withdrawals and adds two years of saving.
Run your own numbers
$1.07M at 65
At a 4% withdrawal rate that pays $42,736 a year, about $3,561 a month, in today's dollars.
- You put in
- $470,000
- Growth adds
- $598,409
- Yearly income
- $42,736
What would change your result
Scenario applied.
- Invest $250 more a month and you'd have $1.29M at 65, $219,674 more.
- Working until 67 raises it to $1.18M, about $47,116 a year of income.
- Waiting five years to start investing would leave you $206,957 short.
What-ifs worked out from your own numbers. Not personal financial advice.
- Portfolio
- You put in
Using a 3.88% real return. All amounts in today's dollars.
Year-by-year table
| Age | Portfolio | You put in |
|---|---|---|
| 30 | $50,000 | $50,000 |
| 31 | $64,154 | $62,000 |
| 32 | $78,857 | $74,000 |
| 33 | $94,132 | $86,000 |
| 34 | $110,000 | $98,000 |
| 35 | $126,484 | $110,000 |
| 36 | $143,608 | $122,000 |
| 37 | $161,397 | $134,000 |
| 38 | $179,877 | $146,000 |
| 39 | $199,074 | $158,000 |
| 40 | $219,018 | $170,000 |
| 41 | $239,735 | $182,000 |
| 42 | $261,258 | $194,000 |
| 43 | $283,616 | $206,000 |
| 44 | $306,842 | $218,000 |
| 45 | $330,970 | $230,000 |
| 46 | $356,036 | $242,000 |
| 47 | $382,074 | $254,000 |
| 48 | $409,124 | $266,000 |
| 49 | $437,225 | $278,000 |
| 50 | $466,416 | $290,000 |
| 51 | $496,742 | $302,000 |
| 52 | $528,245 | $314,000 |
| 53 | $560,971 | $326,000 |
| 54 | $594,969 | $338,000 |
| 55 | $630,286 | $350,000 |
| 56 | $666,976 | $362,000 |
| 57 | $705,090 | $374,000 |
| 58 | $744,684 | $386,000 |
| 59 | $785,816 | $398,000 |
| 60 | $828,545 | $410,000 |
| 61 | $872,934 | $422,000 |
| 62 | $919,046 | $434,000 |
| 63 | $966,950 | $446,000 |
| 64 | $1,016,713 | $458,000 |
| 65 | $1,068,409 | $470,000 |
Quick answers
Is $1 million enough to retire at 60?
At a 4% withdrawal rate, $1 million supports about $40,000 a year in today's dollars. Add Social Security from 67 and it covers many households spending $55,000 to $65,000 a year, as long as the portfolio also funds the gap before benefits start.
Can I collect Social Security at 60?
No. The earliest age for retirement benefits is 62, and claiming then permanently reduces your monthly check. If you stop working at 60, your savings carry you for at least two years.
Can I take money from my 401(k) at 60 without a penalty?
Yes. The 10% early-withdrawal penalty stops applying at age 59½. Withdrawals from traditional accounts are still taxed as ordinary income.
