How to Retire Comfortably at 62

The key to retiring at age 62 is to assess your current assets, estimate future income and determine your preferred lifestyle, including whether you’re willing to work part-time. You’ll also need to figure out how you’ll pay for healthcare until Medicare starts. While 66 or 67 is typically the age at which Americans are eligible to start receiving full retirement benefits from Social Security, many people hope to retire earlier. The specifics of your situation will reveal whether or not that is possible for you.

A financial advisor can help you put a financial plan together for retirement, regardless of when you hope to retire.

What to Consider When Retiring at 62

If you’re set on retiring at age 62, there are a few important things to consider. You can start by asking yourself the questions below:

How much money do you need to cover your monthly expenses?
How much income can you expect from a 401(k), individual retirement account (IRA), pension, taxable investments and cash savings?
What kind of lifestyle would you like to have in retirement?
Will you continue working on a part-time basis, or start a side hustle or business?
How will you pay for medical expenses until you become eligible for Medicare?
How is your overall health, and what is your anticipated life expectancy?
Do you have long-term care and life insurance coverage?
Are you interested in leaving a financial legacy for children, other loved ones or a charity?

The goal in answering these questions is to get a sense of how financially prepared you are to retire at age 62 and whether your plan is achievable. This will largely depend on how much you’ll have saved and what you expect to need.

Anticipating Healthcare Needs

For those who are older, healthcare is one of the largest expenses you’ll contend with. If you’re retiring at age 62, it’s important to keep in mind that you can’t get Medicare until age 65. That leaves a three-year gap during which you’ll have to either purchase health insurance by paying premiums or paying out of pocket.

Assuming you stay healthy or you have a lot of savings in a health savings account (which offers tax-free withdrawals for qualified medical expenses), that might not be too concerning. But if you have a chronic health issue or your spouse does, medical bills could quickly eat into your savings.

Planning Retirement Withdrawals

Another important question to ask when you’re planning to retire at 62 is how much of your investment portfolio you can draw from each year. The 4% rule is a popular rule of thumb for retirement withdrawals. This rule suggests withdrawing 4% of your retirement investments annually, adjusting each year for inflation, to fund a 30-year retirement.

Let’s assume you’re interested in retiring at 62 with $500,000 saved and you expect to live 30 years in retirement. If you want to follow the 4% rule to help ensure you don’t run out of money, your first year withdrawal would be $20,000, or just under $1,700 per month. To make that amount work, you may have to do some significant reshuffling of your budget and lifestyle. Of course, it’s worth noting that figure doesn’t include what you might get from Social Security.

Something else to keep in mind is in which order it makes the most sense to tap into your retirement assets. Generally, you’re better off starting with taxable brokerage accounts first before moving on to tax-advantaged accounts, such as a 401(k) or traditional IRA. This means leaving tax-free Roth accounts for last, so those can continue growing and accumulating interest. By minimizing taxes as much as possible, you can keep more of your retirement income.

Social Security Benefits and Retiring at Age 62

If you’re considering retiring at 62, Social Security likely is one of your primary concerns. That’s because 62 is the first year you’re eligible to receive Social Security benefits. However, your benefit will be lower than if you’d waited longer to start receiving those benefits.

Normally, you’d need to reach your full retirement age, which for most people is 66 or 67, to qualify for the full monthly benefit amount. And to get the largest possible benefit, you’d need to wait until age 70. Taking benefits at age 62, or at any time between 62 and your full retirement age, would reduce your benefit amount.

The amount of the reduction depends on the year you were born. For example, if you were born in 1960 or later, taking Social Security benefits at age 62 would reduce your monthly benefit by 30%. If you’re married and spousal benefits are also being paid, those benefits would be reduced by 35%.

Say, for example, you’re anticipating a $1,000 monthly Social Security payment and your spouse is expecting $500 in spousal benefits. In that scenario, these payments would be reduced to $700 and $325, respectively, by starting to take benefits at 62. This Social Security calculator can tell you how much you can expect to receive, based on your age and when you begin taking benefits.

Continuing the above example, as you might imagine, going from $1,500 per month in combined Social to $1,025 could put a squeeze on your retirement budget, especially if you have fewer assets to fall back on.

Should You Delay Social Security Instead?

Waiting to take Social Security benefits can work in your favor. You can delay taking benefits up until age 70, which would allow you to claim up to 132% of your full monthly benefit amount.

The table below, which is based on Social Security Administration data, shows how much benefits increase every month between full retirement age and age 70.

Delayed Retirement Increase

Birth Years	12-Month Increase Rate	Monthly Increase Rate
1933 to 1934	5.5%	11/24 of 1%
1935 to 1936	6%	1/2 of 1%
1937 to 1938	6.5%	13/24 of 1%
1939 to 1940	7%	7/12 of 1%
1941 to 1942	7.5%	5/8 of 1%
1943 and later	8%	2/3 of 1%

As you can see above, you can enjoy a nice income boost in retirement when you delay Social Security. But remember: That scenario assumes that you won’t need those benefits before then. It’s also a bet that you’ll live long enough that the higher benefit will offset the years you went without Social Security checks.

If you’re set on retiring at 62, you’ll need to be sure you have enough money to cover your expenses. That way, delaying Social Security works for you, not against you.

You could, for example, take on a part-time job or start a business to make extra money. Whether this is feasible may depend on the kind of lifestyle you’re hoping to have in retirement, however. If you’re ready to spend time taking up new hobbies or simply relaxing, then continuing to work in some form may not be high on your priority list.

Social Security and Earned Income

It’s also important to understand how earning income in retirement can impact your Social Security benefits. If you have reached full retirement age (66 or 67), your benefits will not be penalized regardless of how much you earn. However, your benefits could be reduced if you haven’t reached full retirement age and you earn more than a certain amount.

In 2026, your benefits will be reduced by $1 for every $2 you earn above $24,480. And your benefits will be reduced by $1 for every $3 you earn above $65,160.

If you’re married, you and your spouse might consider splitting the difference on Social Security. For example, one of you could take benefits at age 62, while the other waits until full retirement age or even delays benefits until age 70. Running all the numbers can help you decide what arrangement may work best for stretching your retirement dollars.

Taxes and Early Retirement Income

Retiring at age 62 can change how income is taxed, especially when earnings come from multiple sources at the same time. Withdrawals from traditional IRAs and 401(k) plans are taxed as ordinary income, while interest, dividends and realized capital gains from taxable accounts follow different rules. Social Security benefits may also become partially taxable depending on total income. How these sources combine in a given year determines overall tax exposure.

The order in which assets are accessed can affect taxable income levels before full retirement age. Drawing from taxable brokerage accounts may trigger capital gains, while distributions from tax-deferred accounts increase adjusted gross income directly. Higher reported income can affect not only income taxes but also how much of Social Security benefits are subject to tax. This interaction is most relevant during the period between retirement and the start of required minimum distributions (RMDs).

Early retirement can also shift income into years when tax brackets are different than they will be later in retirement. Some retirees experience lower earned income but higher investment income during this phase. This can move income across tax thresholds that influence capital gains rates, Medicare premium calculations later on and the taxation of Social Security benefits. State income taxes may further alter outcomes depending on how retirement income is treated locally.

For individuals leaving the workforce at 62, tax planning becomes part of managing cash flow rather than wages. Decisions around timing of withdrawals, asset sales and benefit claims can change how much income is reported each year. Knowing how different income streams are collectively taxed helps clarify how long savings will last and how retirement income can support ongoing expenses.

Bottom Line

Retirees enjoying retirement comfortably at 62.

There’s no secret formula for retiring at 62 and living a comfortable lifestyle. It all comes down to saving consistently and planning thoroughly beforehand to ensure that you’ll have enough money to last the rest of your life. Social Security is just one part of the picture, but it’s an important one. Weighing the pros and cons of taking Social Security at age 62 can help you decide if you can afford to retire. You’ll also need to draw up a retirement budget to ensure your spending aligns with your available funds.

Tips for Retiring at 62

Consider talking to a financial advisor about whether you’re financially prepared to retire at age 62. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you’re hoping to retire at 62, it’s important to keep a close eye on your investment portfolio. Consider revisiting your portfolio at least once per year to rebalance and harvest tax losses if you’re not doing so already.