INSIGHT

How much money do I need to retire at 62?

Michael Watson, Sergio Fernandez • December 26, 2025

If you’re considering retirement at 62, you’ve reached what many consider the traditional retirement milestone—the age when many Americans step away from their careers and begin accessing the benefits they’ve been building toward for decades.

At 62, your retirement planning landscape looks quite different from those considering earlier retirement. You have access to Social Security benefits and just three years until Medicare eligibility kicks in, which fundamentally changes your planning dynamics. Instead of creating complex workarounds and bridge strategies, you’re working within established systems designed to support retirees.

The question shifts from “Can I afford to retire early?” to “How do I optimize my retirement income and make the most of my legacy planning now that traditional benefits are available?”

Your financial planning focus naturally centers on maximizing portfolio efficiency, coordinating multiple income sources, and implementing sophisticated tax strategies that may not have been as relevant during your wealth-building years.

How much do you need in your portfolio to retire at 62?

Retiring at 62 often allows for more traditional withdrawal rates since you have immediate access to Social Security income and only a short bridge to Medicare. This puts you in a much more favorable position than earlier retirees.

How much you’ll need to save depends primarily on your target spending goals and needs.

Let’s take a closer look at a visualization using a traditional 4% withdrawal rate.

Annual Expenses	Portfolio Needed (No Bridge Income)	Portfolio with $100K Bridge Income
$100,000	$2.5 million	$1.0 million
$150,000	$3.8 million	$2.3 million
$200,000	$5.0 million	$3.5 million
$300,000	$7.5 million	$6.0 million
$400,000	$10.0 million	$8.5 million

Keep in mind that these calculations don’t heavily rely on the income from your Social Security benefits. While Social Security provides valuable supplemental income, it often won’t support luxury lifestyles on its own.

As you’re crunching some numbers, traditional salary multiple guidelines become much more accurate at 62. Having eight to ten times your annual salary saved typically supports retirement, assuming you’re not maintaining extremely high spending relative to your earned income.

You can also use the 25x expense rule—saving 25 times your annual expenses. For example, someone spending $200,000 annually could need about $5 million, which aligns with the preliminary portfolio calculations above.

Understand your retirement lifestyle needs

At 62, you’re in a particularly advantageous position when it comes to retirement planning.

You likely have much clearer visibility into your spending patterns and long-term financial commitments than you did in earlier decades. This clarity can create valuable opportunities for strategic decisions that can significantly impact both your required portfolio size and how you want to approach legacy planning.

Daily living expenses

Your retirement spending will likely shift from your working years in some predictable ways. Those daily commuting costs could disappear while healthcare expenses typically increase. Your dining and entertainment patterns may shift as your schedule becomes more flexible and you have more time to enjoy the activities you love.

Here’s something many retirees discover: spending often peaks during those initial retirement years as they pursue delayed travel plans and activities they’ve been looking forward to for years, then moderates as they settle into comfortable routines. It’s worth thinking about whether your retirement will follow this front-loaded spending pattern or maintain steady expenses throughout.

Long-term care considerations

Long-term care planning shifts from something you might think about someday to something much more immediate at 62. Your current health status and family history should inform both insurance decisions and care preference planning.

Something important to keep in mind is that long-term care insurance premiums tend to increase substantially after 62, making current decisions somewhat time-sensitive. However, self-insurance through portfolio assets can be another viable option.

Healthcare expenses

Healthcare costs become both more predictable and more substantial at 62. Prescription medications, specialist care, and preventive treatments often increase during your 60s and beyond—but at least you can plan for them more accurately than when you were younger.

The three-year gap until Medicare eligibility requires specific planning, but COBRA or private marketplace coverage can bridge this period much more easily than the longer gaps faced by earlier retirees. That shorter timeline works significantly in your favor.

Travel and activity priorities

Early retirement years often represent peak spending periods for travel and active pursuits. Many 62-year-old retirees choose to front-load expensive travel plans while they’re healthy and energetic—and this makes a lot of sense from both a lifestyle and financial planning perspective.

Consider sequencing your retirement activities based on physical demands and costs. International travel and adventure activities might make sense during those initial retirement years, while domestic and less physically demanding activities can extend throughout your retirement as you age.

Legacy planning opportunities

At 62, wealth transfer planning shifts from future consideration to immediate implementation. You may find yourself helping with grandchildren’s education expenses, adult children’s home purchases, and various family financial support needs that often align with this life stage.

Wedding expenses for children, educational funding for grandchildren, and down payment assistance represent substantial potential cash outflows that should be incorporated into your retirement planning—if that’s something you want to do.

When it comes to your estate plan, sophisticated strategies such as grantor-retained annuity trusts, charitable remainder trusts, and generation-skipping trust strategies are most effective when implemented before significant health changes occur. The window for implementing these strategies effectively can narrow as you age.

Current federal estate tax exemption levels provide substantial gifting opportunities that may not persist indefinitely. It’s helpful to coordinate your annual exclusion gifts and lifetime exemption usage with your retirement cash flow needs to help ensure everything works together smoothly.

Optimize your financial strategies

Your last few working years or early retirement period create unique opportunities for financial optimization that simply aren’t available during pure wealth-building phases or later in retirement.

Foundation retirement contributions

Even at 62, maximum annual contributions remain valuable if you’re still working:

401(k): $23,500 plus $7,500 catch-up in 2025 (If you’re 60-63, you can get an extra catch-up limit)
IRA: $7,000 plus $1,000 catch-up
HSA: $4,300 individual or $8,550 family coverage plus $1,000 in catch-up contributions

These contributions provide final opportunities for tax-advantaged savings while you potentially still have earned income to support them. Every dollar you can shelter from taxes now can help you grow your retirement accounts.

Pension distribution decisions

If you’re fortunate enough to have a traditional pension plan, you’re likely facing some irrevocable decisions at 62. The choice between lump sum versus annuity elections will affect your retirement income structure for the rest of your life.

Lump sum distributions provide portfolio control and legacy planning flexibility, but they shift longevity and investment risk to you. Annuity payments provide predictable income but limit flexibility and legacy opportunities.

You’ll want to consider your other income sources, risk tolerance, and legacy goals when making these permanent decisions. There’s no universal right answer—it depends entirely on your specific circumstances and what matters most to you.

Social Security filing strategy

Here’s where things get interesting from a planning perspective. Social Security claiming at 62 permanently reduces your monthly benefits by approximately 25-30% compared to full retirement age benefits. For high earners, this reduction might be perfectly acceptable given your modest reliance on Social Security for lifestyle support.

However, delayed claiming until age 70 can increase benefits by 8% annually after full retirement age, potentially making the delay worthwhile for longevity planning and spouse benefit optimization.

If you’re married, you have additional claiming strategy options that single retirees simply don’t have access to. Spousal benefits, survivor benefits, and coordinated timing can optimize household Social Security income over both lifetimes.

Consider which spouse should claim early versus delay based on earnings records, health status, and overall retirement planning goals. These decisions affect survivor benefits that could last decades, so they deserve careful consideration and probably some professional guidance.

Plan your healthcare transition

Healthcare planning at 62 focuses on bridging those three years until Medicare, while potentially managing increasing medical needs and prescription costs.

Pre-Medicare coverage options

COBRA can extend your employer coverage for up to 18 months, which gets you halfway to Medicare eligibility. However, premium costs increase substantially when employers stop contributing to coverage costs, so you’ll want to budget accordingly.

Private marketplace health insurance plans provide alternatives with potentially different provider networks and prescription coverage. When evaluating these options, compare total costs including premiums, deductibles, and out-of-pocket maximums to get the full financial picture.

Medicare preparation planning

Medicare enrollment requires active decisions about coverage types and supplemental insurance that will affect your healthcare experience for years to come. Original Medicare with Medigap policies offers different trade-offs than Medicare Advantage plans, and understanding these differences now will help you make better decisions.

Understanding Medicare coverage limitations also helps inform long-term care insurance decisions and health savings account usage strategies for the years ahead.

Medicare Part B and Part D premiums also include income-related monthly adjustment amounts (IRMAA) for high earners. These surcharges apply based on your modified adjusted gross income from two years prior, which can create some timing challenges.

Planning withdrawal strategies and Roth conversions with IRMAA thresholds in mind can help minimize these additional premium costs throughout your Medicare eligibility. It’s worth understanding these thresholds now, while you still have time to plan around them.

Health Savings Account optimization

HSAs provide unique advantages for retirees with high-deductible health plans, and these advantages actually increase after age 65. HSA withdrawals for non-medical expenses face only ordinary income tax without penalties after 65, making them similar to having an additional retirement account.

Maximizing HSA contributions during your final working years and preserving balances for retirement healthcare expenses can provide significant tax advantages throughout your retirement.

Create your comprehensive retirement plan

Your retirement at 62 is about more than just having enough money—it’s about optimizing all the systems and benefits you’ve earned while creating a legacy that reflects your values and supports the people you care about.

If you’re ready to explore what retirement at 62 could look like for your specific situation, contact BPM’s wealth management team to develop comprehensive strategies that coordinate Social Security benefits, healthcare transitions, tax optimization, and legacy planning tailored to your circumstances.

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. 