Want To Retire at 60? See if You Can Answer These 5 Questions
Forget waiting for Social Security and Medicare to kick in. You may be able to retire sooner than you think.
Many Americans retire at 60 or even earlier. For some, they have no choice due to health issues, job loss or a change in their family situation. For others, they are done working and are ready to start their next chapter.
Either way, it's not uncommon to retire before Social Security and Medicare kick in, even if it's not the average.
“A lot of people, the goal of retiring before they collect Social Security and Medicare stems from thinking they have to work longer and realizing they don’t,” says Cassandra Rupp, a senior wealth advisor at Vanguard. “It opens up the conversation.”
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
When it comes to retiring at 60, there are two considerations: financial and emotional. Can you afford it, and will you be happy?
Not sure? If you can answer these five questions, you may be on your way to retiring at 60.
1. Do you have a handle on your expenses?
Retiring at 60 sounds like what dreams are made of, but to make it a reality, you have to afford it. After all, you're adding a few more years of retirement expenses to the mix.
The only way you’ll know the answer is if you know how much you’ll 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.
This leads to the question most people ask first: How much savings do you realistically need to retire at age 60? The answer depends entirely on your burn rate.
Let’s say you have $1 million saved and expect to 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, or a signal to work more, but if you didn't know what your expenses were, you couldn't make the right choice.
2. Do you have a way to fund retirement before Social Security kicks in?
Unless you are a widow or widower, you can’t begin claiming Social Security until 62, and ideally, you want to wait until your full retirement age to start receiving your benefits. If you collect early, you’ll see a 30% reduction in your payout.
During the period you're not collecting Social Security, you’ll have to bankroll your retirement from other sources, whether it's your retirement savings, passive income from a real estate investment, or a side gig.
“You have to rely on your own portfolio for those years,” says Sharon Carson, executive director of J.P. Morgan Asset Management. “Do you have adequate resources to do that?”
If you are going to need Social Security early, how will it impact the quality of your retirement over the long haul? Will that 30% reduction in your Social Security benefits for twenty-plus years hurt you?
Retiring early requires a little give and take. Sure, you are tapping your tax-advantaged accounts, like a 401(k) or IRA, early during those gap years, but that guarantees you are giving yourself a bigger Social Security check for your lifetime.
When you consider that Social Security is adjusted for inflation, waiting until at least your full retirement age is the best hedge against longevity risk. “People with healthy habits live a lot longer, and if you are going to live a lot longer, it pays more to wait,” says Carson.
3. 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 2025 should expect to spend an average of $172,500 in health care and medical expenses. In general, the average cost of health care is soaring.
Sure, Medicare covers 80% of your health care costs, but it doesn’t kick in until you are 65. If you retire at 60, you'll have five years to self-fund your health care. You won’t have your company’s subsidized insurance to rely on either.
There's the Consolidated Omnibus Budget Reconciliation Act, or COBRA, which enables you to continue your employer-provided health insurance for a period of time, typically 18 to 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'll 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.” Keep in mind that premiums have risen sharply in 2026, after Congress allowed premium subsidies to lapse.
If you have a Health Savings Account, you can use those tax-free dollars to pay for out-of-pocket medical expenses, deductibles and even COBRA premiums during that coverage gap.
When determining if you can afford to retire at 60, make sure to factor health care into your annual budget and what impact it will have on your retirement savings over those five years before Medicare kicks in.
Remember, it is not static. Total health care costs in the U.S. are projected to reach $8.6 trillion in 2033, growing 54% from $5. 6 trillion in 2025.
4. What will you do with your free time?
The idea of sleeping in, kicking back and strolling on the beach may seem extremely appealing, but is it enough to keep you happy and busy for the next twenty-plus years? Probably not.
People who tend to be happy in retirement are those with a purpose. Before you retire, make sure you know how you’ll spend your time, especially in that critical first year.
“Think about what I'm going to do that gives me purpose, gives me reason to get up in the morning," says Carson. “It doesn’t have to be a ‘save the world’ purpose. It could be I’ll do something with my neighbors, see my grandkids or socialize with others.”
We spend so much time saving and planning for how we will cover our expenses in retirement, but give little thought to what we will do with our newfound time.
Will it be spent traveling, pursuing a hobby, starting a new career, volunteering, or is it all about quality time with family? And how will you pay for those pursuits without the help of Social Security or a full-time job? With extra retirement time to fill, it's even more important to plan for what you'll do with your freedom.
5. Are you getting professional help?
Retiring at 60 is a big deal. Once you leave the workforce, it's hard to go back, which is why you have to think long and hard before you make the move.
That’s why it’s one of those decisions in which it pays to seek professional help from a financial adviser. A trusted adviser can test out different scenarios to see if you can make retirement at 60 work.
Not sure if you should wait beyond 62 to collect Social Security and draw from your 401(k), a financial adviser can help you figure that out. Confused about how your asset allocation should be since you are retiring five to seven years earlier? A financial adviser can help with that, too.
“It doesn’t stop at retirement,” says Rupp. “There are further strategies to implement.”
It doesn’t have to be a dream
Retiring at 60 may seem like a pipe dream, but it's far from impossible.
“You have to prepare ahead of time. You can’t decide at age 59, you want to retire at 60,” says Rupp. “You need at least a couple of years to prepare.”
That lead time is crucial for stress-testing your math. But if you plan intentionally—mapping out how you’ll bridge the gap to the day when you take Social Security, navigating the pre-Medicare health care maze and ensuring your nest egg can go the distance, you can turn that early retirement dream into a reality.
Related content
-
6 Champagne Problems Successful Retirees FaceWhat do you do if your biggest financial threat is simply having too much of a good thing — money?
-
Congress is Set for a Busy WinterThe Kiplinger Letter The Letter editors review the bills Congress will decide on this year. The government funding bill is paramount, but other issues vie for lawmakers’ attention.
-
A Portfolio Checklist If You're Planning to Retire in 2027Are you planning on retiring in 2027? This portfolio checklist will help put you on the right path.
-
6 Champagne Problems Successful Retirees Face
What do you do if your biggest financial threat is simply having too much of a good thing — money?
-
A Portfolio Checklist If You're Planning to Retire in 2027
Are you planning on retiring in 2027? This portfolio checklist will help put you on the right path.
-
How to Avoid Being Buried by the Tax Avalanche in Retirement: Tips From a Wealth AdviserAll that cash you have in tax-deferred accounts could launch you into a higher tax bracket when you start withdrawals. It's time to protect your income.
-
I'm a Financial Adviser: This Is the Real Secret to Retirement SuccessFor real retirement security, forget about chasing returns and focus instead on the things you can control: income, taxes, risk-taking and decision-making.
-
Is Your Retirement Plan Based on Social Security Fact or Fiction?One in two Americans don't know much about Social Security — and some are basing their retirement on mistaken beliefs. It's time to separate fact from fiction.
-
Are You Investing to Score Points or Make Money? Cautionary Tales From an Investment AdviserHave you become numb to risk? Is your brokerage app or website fueling your desire to trade? An investment adviser explains why it always pays to be cautious.
-
Your Parents' Retirement Plan Won’t Work for You (The Stats Are In)Five stats show how you need to rethink retirement, because "the future ain’t what it used to be."
-
Are Roth Conversions for Retirees Dead in 2026 Because of the New Tax Law?The OBBBA's permanent lower tax rates removed the urgency for Roth conversions. Retirees thinking of stopping or blindly continuing them should do this instead.
