INSIGHT

How much money do I need to retire at 65?  

Michael Watson, Sergio Fernandez • January 2, 2026

Services: Wealth Management

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If you’re planning to retire at 65, you’re approaching what’s traditionally been considered “full” retirement age—the milestone when Social Security, Medicare, and all the systems you’ve been paying into for decades finally align to support your retirement lifestyle. 

At 65, your retirement planning landscape expands to include new opportunities and systems that weren’t available before. You’re asking both “How do I continue building wealth strategically?” and “How do I make this wealth work most effectively to accomplish everything I want to do with it?” 

Your financial planning focus naturally centers on managing portfolio distributions efficiently, coordinating multiple benefit systems, and implementing sophisticated wealth transfer strategies while you’re still healthy and able to make these decisions. 

How much do you need in your portfolio to retire at 65? 

Retiring at 65 allows for more traditional withdrawal rates since you have immediate Medicare cost savings and full Social Security benefits.  

However, high earners have some unique considerations, including Medicare premium surcharges and the opportunity to optimize substantial Required Minimum Distributions in just a few years. 

Here’s what you may need based on different spending levels, assuming a 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
$500,000	$12.5 million	$10.0 million

The 15-20x expense rule becomes much more accurate at 65 when you factor in Medicare cost advantages. Someone spending $200,000 annually might need $4 million+ when accounting for Social Security supplementation and the significant savings from Medicare versus private insurance. 

Keep in mind that, depending on your date of birth, large Required Minimum Distributions may begin at age 73, creating opportunities for strategic tax planning. If you have portfolios exceeding approximately $2.6 million in tax-deferred accounts, you’ll be managing RMDs exceeding $100,000 annually, which creates both tax planning considerations and opportunities for continued wealth optimization. 

New financial roadblocks to plan for when retiring at 65 

At 65, retirement planning evolves to include strategic optimization and purposeful distribution alongside continued growth opportunities. 

IRMAA 

Medicare eligibility eliminates the uncertainty of healthcare coverage, but it introduces some new considerations you’ll want to understand.  

Medicare includes income-related premium surcharges, called IRMAA (Income-Related Monthly Adjustment Amount), which can significantly impact your healthcare costs. These surcharges apply to individuals with 2023 income above $106,000 or married couples above $212,000. 

For 2025, Part B surcharges range from $74 to $443.90 monthly, while Part D surcharges range from $13.70 to $85.80 monthly. This means high-earning retirees could pay an additional $530 per month ($6,360 annually) on top of standard Medicare premiums. 

What makes IRMAA particularly challenging for retirement planning is the two-year lag time. Your 2025 Medicare premiums are based on your 2023 income, which creates timing complications for strategies like Roth conversions and large withdrawals.  

Additionally, you’ll need to make decisions about Medicare supplement insurance (Medigap) versus Medicare Advantage plans that will affect your coverage for years to come. Supplement premiums provide predictable costs and broader provider networks, while Advantage plans offer lower premiums but typically have more restricted networks. 

You’ll want to coordinate your choices with HSA usage strategies. HSAs become particularly powerful accounts after 65, allowing tax-free withdrawals for qualified medical expenses or taxable withdrawals for any purpose without penalties. 

Required Minimum Distributions  

Substantial retirement account balances create RMD requirements beginning at age 73. Portfolios exceeding $1 million in tax-deferred accounts will generate RMDs exceeding $40,000 annually, increasing each year based on life expectancy tables. 

The key is planning now, while you still have eight years to implement strategies that can optimize the tax impact of these distributions. This creates opportunities for continued wealth optimization rather than just tax minimization. Large RMDs can also trigger or increase IRMAA surcharges, making coordination between RMD planning and Medicare premium management essential. 

Qualified longevity annuity contracts (QLACs) offer one strategic approach worth considering. QLACs allow up to $200,000 of retirement account assets to be invested in deferred annuities that begin payments at age 85. This creates opportunities for managing Required Minimum Distribution calculations while providing a source of income later in life.  

Qualified charitable distribution planning becomes available at age 70½, allowing up to $105,000 annually to be donated directly from IRAs to qualified charities without generating taxable income. This satisfies RMD requirements while avoiding tax consequences—a powerful strategy for charitably inclined retirees. 

Tips to keep optimizing your wealth  

At 65, your financial strategies focus on optimizing wealth growth, managing tax-efficient distributions, and implementing sophisticated planning techniques while you have the health and time to maximize these opportunities. 

Keep making retirement contributions 

If you’re still working, you have valuable opportunities to maximize your tax-advantaged savings: 

• 401(k) contributions: $23,500 plus $7,500 catch-up in 2025 
• IRA contributions: $7,000 plus $1,000 catch-up 
• HSA maximization: $4,300 individual or $8,550 family coverage 

These provide opportunities for continued tax-advantaged wealth building while potentially reducing your current-year income for IRMAA calculation purposes—a valuable double benefit that becomes particularly strategic at this stage. 

Refresh your investment approach 

Asset allocation becomes particularly strategic at 65. You’ll want to maintain growth potential for long-term wealth building while having adequate liquidity for distributions.  

Consider a glide path approach that maintains meaningful equity exposure that gradually adjusts your asset allocation over time. Many retirees keep 60-70% of their portfolio in equities to combat inflation and have potential market growth.  

Tax-loss harvesting in taxable accounts can provide ongoing benefits, generating losses to offset gains while maintaining your desired asset allocation. 

Claim Social Security at the right time 

At 65, your Social Security claiming options depend on when you were born. 

If you were born before 1960, you may have already reached or passed full retirement age (which ranges from 65 to 66 years and 10 months). If you were born in 1960 or later, your full retirement age is 67, meaning at 65, you’re still two years away from receiving your full benefit amount. 

You can claim Social Security as early as 62, but benefits are permanently reduced by approximately 25-30% compared to full retirement age benefits. If you’re 65 and born in 1960 or later, claiming now would still be considered “early” with reduced benefits. 

For every year you delay claiming past full retirement age, your benefits increase by approximately 8% annually. This can result in benefits that are 24-32% higher than your full retirement age amount, depending on your birth year—a significant boost that lasts for life. 

If you’re married, coordinating claiming strategies between spouses becomes particularly valuable when you consider different birth years and full retirement ages. Spousal benefits and survivor benefits are based on the higher earner’s benefit amount and can last for decades. 

The key is understanding where you stand relative to your specific full retirement age and viewing Social Security as one component of your overall retirement income strategy, coordinating it with portfolio withdrawals, RMD planning, and IRMAA management. 

Look into legacy planning opportunities 

At 65, you have valuable opportunities to implement wealth transfer strategies that may have been in the planning stages for years. Whether it’s grandchildren’s education funding, family business succession, or charitable legacy planning, you can coordinate active wealth transfer while continuing to build wealth for your own goals. 

Many families at this stage find themselves balancing immediate family support with long-term wealth transfer objectives. Generation-skipping transfer tax exemptions allow substantial wealth transfers to grandchildren, while charitable giving strategies like donor-advised funds provide immediate tax deductions with flexible distribution timing.  

The key is coordinating these strategies with your other retirement income sources and upcoming Required Minimum Distributions to optimize the timing and tax benefits. 

Create your comprehensive wealth plan 

Your retirement at 65 represents an exciting new chapter where decades of planning and saving create opportunities for both enjoying your wealth and continuing to build it strategically. It’s about optimizing all the systems and benefits you’ve earned while creating a legacy that reflects your values and supports the people and causes you care about. 

If you’re ready to explore how to optimize your wealth strategies and distribution approaches at this important milestone, contact BPM’s wealth management team to develop comprehensive strategies that coordinate Medicare benefits, tax optimization, RMD planning, and legacy implementation tailored to your specific situation. 

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. Guarantees are based on the claims-paying ability of the issuing company. 

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.