INSIGHT

How much money do I need to retire at 60?

Michael Watson, Sergio Fernandez • December 26, 2025

If you’re dreaming about stepping away from full-time work at 60, you’re not alone. Maybe you want more time to travel, volunteer, or just slow down. The big question is — can you afford it? – The answer depends on your lifestyle, spending habits, debts, health, legacy plan, and more.

– If you’re thinking about retiring at 60, there’s more to it than just your investment balance. You’ll also want to think through things like when to start Social Security and how to bridge the gap until Medicare kicks in.

Portfolio targets for retiring at 60

Retiring at 60 is still technically retiring early—you’re not eligible for Social Security quite yet (age 62), and don’t qualify for Medicare (age 65)– for much of the population, so you’ll still need to plan your withdrawals – strategically, being mindful of how market volatility may impact your sustainable withdrawal rate. Here are the portfolio requirements for different spending levels:

Portfolio requirements by expense level

For someone planning to spend around $120,000 a year, you may need roughly $3 million saved if you plan to fully retire. But if you can bring in even $100,000 a year through part-time work or rental income, that number can drop by nearly half. Using the widely accepted 4% withdrawal rule, here are some withdrawal rates for 25-year retirement: –

Income Generated by Portfolio Size (at 4% withdrawal rate)

Portfolio Size	Annual Income	Bridge Income Needed for Various Expense Levels
$500,000	$20,000/year	$60K bridge for $80K expenses; $100K bridge for $120K expenses
$1.5 million	$60,000/year	$20K bridge for $80K expenses; $60K bridge for $120K expenses; $100K bridge for $160K expenses
$2.0 million	$80,000/year	Covers $80K expenses; $40K bridge for $120K expenses; $80K bridge for $160K expenses
$2.5 million	$100,000/year	Covers $80K expenses; $20K bridge for $120K expenses; $60K bridge for $160K expenses; $100K bridge for $200K expenses
$3.0 million	$120,000/year	Covers $80K–$120K expenses; $40K bridge for $160K expenses; $80K bridge for $200K expenses
$3.8 million	$152,000/year	Covers $80K–$120K expenses; $8K bridge for $160K expenses; $48K bridge for $200K expenses; $98K bridge for $250K expenses
$4.0 million	$160,000/year	Covers $80K–$160K expenses; $40K bridge for $200K expenses; $90K bridge for $250K expenses
$5.0 million	$200,000/year	Covers $80K–$200K expenses; $50K bridge for $250K expenses
$6.3 million	$252,000/year	Covers all expense levels shown ($80K–$250K) without bridge income

As you can see, bridge income can be a big help when planning your nest egg. Generating $100,000 annually through consulting, part-time work, or investment income can substantially reduce your needed portfolio – when compared to complete financial independence in these scenarios.

The traditional salary multiple guideline suggests having six to eight times your annual salary saved by age 60. For example, someone earning $200,000 would target $1.2-1.6 million. While this benchmark works for conventional retirement at 65, it -may fall short for retiring at 60 without some bridge income or lifestyle adjustments.

Evaluate your lifestyle requirements

At 60, you likely have clearer visibility into your retirement spending patterns and financial commitments than you did in your 40s or 50s. This creates opportunities to make strategic decisions that can significantly impact your required portfolio size.

Housing and relocation decisions

Geographic relocation becomes increasingly feasible at 60 as career constraints diminish. Moving from high-cost metropolitan areas to regions with lower living expenses -may reduce your required portfolio by millions while potentially enhancing your retirement lifestyle.

Another important consideration is the tax implications of different states. States without income taxes can provide meaningful savings on retirement account withdrawals and Social Security benefits. Property tax differences also impact your ongoing housing costs substantially.

As you consider a change in geography and state during retirement, downsizing decisions may also affect both your upfront capital and ongoing expenses. Downsizing from a large family home to a smaller home more suitable for you as you age may also inject significant assets into your retirement portfolio while reducing property taxes, insurance, and maintenance costs.

Healthcare planning considerations

Healthcare costs often become more predictable and pressing at 60. Current health conditions and family medical history should inform both your expense budgeting and insurance planning strategies.

Long-term care insurance deserves serious consideration at this age. Premium costs increase significantly after 60, but the coverage becomes more relevant as you approach ages when care needs typically emerge. Whether you have a LTC policy, or choose to self insure, this can have a material impact on the required portfolio balance necessary to cover your retirement expenses, including LTC.

Prescription medication costs and specialist care often increase during your 60s. Factor these evolving healthcare needs into your retirement expense planning, particularly during the five-year gap before Medicare eligibility. You may also want to consider Medicare supplemental plans to make your out-of-pocket costs more predictable.

Travel and lifestyle priorities

Early retirement years often represent peak travel and activity periods before health limitations potentially constrain these pursuits. Many 60-year-old retirees -prioritize expensive travel plans during their initial retirement years.

When planning for retirement lifestyle, consider whether your retirement spending will follow a declining pattern—higher expenses in early retirement years that decrease as you age and become less active—often referred to as “retirement stages” spending. Or, whether you’re willing to adjust your lifestyle each year as markets go up and down. Your spending pattern affects your portfolio withdrawal strategy and asset allocation decisions.

Debt and financial obligations

Outstanding debt obligations require strategic evaluation at 60. Would you prefer to have lower monthly expenses, or are you comfortable carrying debt into retirement? Certain debt, like low-rate mortgage debt, might make sense to maintain if investment returns exceed borrowing costs, while high-rate credit card debt should typically be eliminated before retirement.

Family financial commitments often persist into your 60s. Grandchildren’s education expenses, adult children’s financial support, or aging parent care can represent substantial ongoing costs that must be incorporated into your retirement planning.

Maximize your final earning years

Your late 50s and early 60s often represent peak earning potential, creating opportunities to accelerate wealth accumulation through sophisticated strategies not available earlier in your career.

Foundation retirement strategies

Maximum contribution strategies should be your starting point:

401(k) contributions: $23,500 plus $7,500 catch-up in 2025 (with a special catch up for those ages 60-63)
IRA contributions: $7,000 plus $1,000 catch-up
HSA maximization: $4,300 individual or $8,550 family coverage

Catch-up contributions may provide substantial advantages for 60-year-old retirees. The additional $8,500 in annual tax-advantaged savings, compounded over several years, can meaningfully impact your retirement readiness.

Roth versus traditional contribution decisions become critical as you approach retirement. Maintaining some tax diversification provides flexibility in what your annual income picture looks like each year, your current tax bracket, expected retirement tax rates, and legacy planning goals should inform these choices.

Final executive compensation decisions

Many high earners face significant compensation decisions during their final working years. Stock option timing, deferred compensation elections, and equity acceleration choices can substantially impact your retirement portfolio.

Consider spreading large equity compensation events across multiple years to manage tax brackets. Coordinate these decisions with your retirement timeline to optimize both tax efficiency and cash flow needs.

Executive severance packages often include valuable benefits beyond cash payments. Extended healthcare coverage, outplacement services, and non-compete payment arrangements can often be negotiated, and provide meaningful bridge benefits.

Large-scale charitable giving strategies

For those with philanthropic interests, gifting strategies become more relevant as wealth accumulates and tax planning needs evolve. Donor-advised funds allow immediate tax deductions while maintaining control over distribution timing.

Charitable remainder trusts can provide income streams while offering tax benefits and legacy planning advantages. These strategies work particularly well for high earners with appreciated assets approaching retirement.

Consider bunching charitable deductions into single tax years to exceed standard deduction thresholds, particularly during high-income years before retirement.

Create your bridge strategy

Retiring at 60 creates a two-year gap before early Social Security eligibility at 62 and a five-year wait for Medicare. Your income plan must address both income replacement and healthcare coverage during this transition period. This gap also presents significant planning opportunities to take advantage of lower income tax years, and minimize future challenges—RMDs, cost of Medicare in the future, Social Security tax torpedo.

Social Security optimization timing

Social Security claiming decisions become concrete planning considerations at 60. While you can claim benefits as early as 62, – this decision permanently reduces your monthly payments by approximately 25-30% compared to full retirement age benefits.

The decision involves weighing immediate cash flow needs against lifetime benefit optimization. Someone with a substantial retirement portfolio might delay claiming to maximize benefits, while others might claim early to preserve portfolio assets, especially if leaving a legacy or inheritance is a priority.

Consider spousal benefit strategies if you’re married. Coordinating claiming strategies between spouses can optimize household Social Security income over both lifetimes.

Pre-Medicare healthcare planning

Healthcare coverage represents one of your largest expenses during the five-year Medicare gap. If you’re eligible, COBRA may provide up to 18 months (36 months in rare circumstances) of continued employer coverage, though at significantly higher premium costs.

Private health insurance through ACA marketplace plans become your primary long-term coverage option. Premium costs vary dramatically by location and income level, potentially requiring substantial budget allocation for healthcare expenses.

Health Savings Accounts become particularly valuable for 60-year-old retirees. The triple tax advantages make HSAs powerful vehicles for funding healthcare expenses, including Medicare expenses, throughout retirement

Income bridge strategies

Taxable investment accounts provide flexible income access without early withdrawal penalties. These accounts allow you to manage tax liability year by year based on your other income sources. Any realized gains from taxable accounts would be subject to preferential capital gains treatment instead of ordinary income taxes if the investment was held for longer than 1 year.

Real estate investments -may generate steady cash flow through rental income while providing inflation protection and tax advantages through depreciation deductions.

For those that would prefer a gradual transition into retirement, part-time work or consulting -can help you leverage your established professional network and unique skills. Many 60-year-old retirees find fulfillment in selective work arrangements that provide income while allowing substantial lifestyle flexibility.

Advanced Roth conversion opportunities

Early retirement may create opportunities for strategic Roth conversions during lower-income years. Converting traditional retirement account assets to Roth accounts can optimize your lifetime tax situation and provide tax-free income on qualified withdrawals in later retirement years.

Coordinate conversion strategies with other income sources to help manage tax brackets effectively. The goal is to convert assets during years with lower overall income before Social Security benefits begin. Also be mindful of the impact these conversions have on the cost of Medicare.

Plan your customized retirement strategy

Retiring at 60 offers advantages over earlier retirement ages while still requiring sophisticated planning. Your proximity to Social Security and Medicare creates opportunities that don’t exist for retirees in their 40s and 50s.

The complexity of coordinating final compensation decisions, optimizing Social Security claiming strategies, managing healthcare coverage transitions, and implementing tax-efficient withdrawal strategies requires professional guidance tailored to your unique circumstances.

Everyone’s version of retirement looks different — and your plan should too. If you’re wondering what retiring at 60 could look like for you, Contact BPM’s wealth management team to develop comprehensive strategies tailored to your final earning years, benefit optimization timeline, and retirement lifestyle objectives.

This material is for informational purposes only and is not intended to provide specific advice or recommendations for any individual. This information is not intended for use as tax advice. The examples given are hypothetical and are for illustrative purposes only. Actual results may vary from those illustrated.

Securities offered through Valmark Securities, Inc. Member FINRA, SIPC | Investment Advisory services offered through BPM Wealth Advisors, LLC and/or Valmark Advisers, Inc. each an SEC Registered Investment Advisor | BPM LLP and BPM Wealth Advisors, LLC are entities separate from Valmark Securities, Inc. and Valmark Advisers, Inc. 