How to Retire at 67: Step by Step Plan

If you were born after 1960, your full retirement age (FRA) is 67, according to the Social Security Administration. Most of us imagine retiring at our FRA, even though we may dream about retiring earlier. If 67 is your goal, there are steps you should take to ensure you can retire at 67. You may need to adjust your retirement plan as you go through life. However, these steps will give you a general idea of what you should do to prepare for retirement at 67.

Find someone to help you figure out how to retire at 67 with SmartAsset’s free financial advisor matching service.

Step 1: Establish an Emergency Fund

Most experts advise starting by building an emergency fund to secure your financial security.

Although everyone’s needs are different, it is safest to save enough to cover six months of your take-home pay. For example, if you earn $2,500 per month, you should save $15,000 in your emergency fund to cover six months. If you are laid off or out of work, this gives you six months worry-free to find a job.

Also, check whether your employer offers a retirement plan with a matching contribution. This can help you save for retirement while you build up your emergency fund. The same is true if your employer offers a defined benefit retirement plan, although these are not so common now.

The two most popular options for your emergency fund are high-yield online savings accounts and money market mutual funds. This is because they are assets that you can liquidate quickly.

High-yield online savings accounts are offered by banks and other financial institutions. They pay more in interest than your traditional branch bank.

There is a wide selection of money market mutual funds. Money market mutual funds invest in fixed-income securities with short maturities and low credit risk. One popular option is in a mutual fund that offers Treasury Inflation-Protected Securities (TIPS), which protect your principal from inflation. Remember that although the risk of money market mutual funds is low, they are riskier than high-yield online savings accounts.

Another option is the Series I Savings Bond. They can pay a high interest rate compared to other fixed-income investments.

Step 2: Estimate How Much You Will Need to Retire at 67

The latest data shows the median income of an American household is $83,730, ¹ while the average life expectancy in America is 78.4 years. ² If you retire at 67, you will have approximately 12 years to fund your retirement. During retirement, you may have more expenses for travel, entertainment and medical issues. However, you may have less for housing and utilities if your mortgage is paid off or you downsize.

Most people estimate they will need 70% to 90% of their current income when they retire. Using today’s median income, you can calculate roughly how much money you will need in retirement. Multiply the median salary of $78,538 by 80%. Then, multiply your answer by 12 years.

$83,730 x .80 = $66,984 x 12 years = $803,808

That is a rough estimate of how much you will need to retire at 67.

However, this does not include your Social Security benefits. The average Social Security benefit in 2026 is $2,071, according to the Social Security Administration. However, if you have a working spouse or partner, they may also have a retirement plan. This will affect how much you need to save.

Another way to estimate how much you need to save for retirement is to make a budget and keep diligent records of your spending. After some months, you will have an estimate of your monthly spending. Multiply that by 12 months to get your annual financial requirements. Then multiply that figure by the 12-year average life expectancy. This gives you the total estimated savings you need for your expenses, based on the average lifespan.

Use a retirement calculator to estimate your retirement savings, or consult a financial advisor who can help you make a plan for your goals.

Step 3: Understand Social Security and Medicare

If you plan to retire at 67, you should still sign up for Medicare Part A when you turn 65 ³ . You don’t have to enroll in Medicare Part B at this time. However, if you don’t enroll by your 65th birthday, you may face a higher premium and delayed coverage. The enrollment period for Parts A and B begins three months before you turn 65.

You may qualify for a Special Enrollment Period for Medicare Part B ⁴ . It allows you to delay enrollment in Medicare Part B (although you must still enroll in Medicare Part A at 65). The Special Enrollment Period ends eight months after you retire; at this point, you must enroll in Medicare Part B. This saves you money on your Medicare Part B premiums. However, to qualify, you must be covered by either your or your spouse’s workplace healthcare plan.

If you retire at 67, you can apply for Social Security benefits either at full retirement age (FRA) or one year after ⁵ . If your FRA is 66, you will earn delayed retirement credits for that year until you retire at 67. This, in turn, increases your Social Security benefits. To get the maximum benefit from Social Security, wait until 67 to start drawing benefits.

If you have income sources beyond Social Security, you can earn delayed retirement credits until you begin drawing benefits or age 70, whichever comes first. These credits add to your Social Security income stream. You can accrue two-thirds of 1% for every month you delay your benefits after FRA ⁶ .

Delaying Social Security benefits is often a good tax strategy since taxes can be as high as 85% ⁷ . Your tax liability will be lower on retirement accounts.

Step 4: What Type of Retirement Accounts Will You Use to Invest Your Savings?

If you have a workplace 401(k) or comparable plan, such as a 403(b), with a matching contribution, you should absolutely invest in the 401(k) for the free money.

Most 401(k)s have several types of investments you can choose from. In 2026, you can invest a maximum of $24,500 in a 401(k) for 2025 with an $8,000 catch-up contribution for employees 50 or older. ⁸ Income limits also apply.

Even if your workplace 401(k) does not have a matching contribution, it still has higher contribution limits than the limit for an individual retirement account (IRA). In 2026, IRA limits are $7,500 annually, with a $1,100 catch-up contribution if you are 50 or over.

You can choose which type of IRA suits you best. For a tax write-off, consider a traditional IRA since you don’t pay taxes until you withdraw the funds after age 59 1/2. This can be beneficial because your tax bracket may be lower in retirement. Another option is a Roth IRA.

There are two other investment vehicles to consider: a 529 plan and a health savings account (HSA).

• 529 College Savings Plan. The 529 plan can be an excellent savings instrument when paying for college, pre-college educational expenses or even student loan debt, up to $10,000. With your contributions in a tax-advantaged account, you can invest in potentially high-growth stocks, ETFs or mutual funds. You can even change the beneficiary if the original beneficiary skips college.

• Health savings account. You can establish a health savings account (HSA) if you are under 65 and have a high-deductible healthcare plan (HDHP). These tax-advantaged accounts are offered by financial institutions and, often, employers. This money is yours and rolls over each year. However, you must use them for qualified medical expenses.

There are several other retirement savings vehicles that you can mix and match for your portfolio.

• 401(k) or 403(b)
• Traditional or Roth IRAs
• SEP or Simple IRAs (if self-employed)
• Taxable brokerage accounts
• High-yield savings accounts
• Money market mutual funds
• CDs

A financial advisor can help you find the right asset allocation for your portfolio.

Step 5: Funding Your Retirement Accounts

There are three considerations when determining which types of investments to use to fund your retirement accounts.

• How much time do you have until retirement?
• What is your risk tolerance? 
• What are your investment goals?

The types of securities you choose for your retirement accounts depend on your answers.

You should not have all your money in one type of investment, like stocks. Instead, you should diversify your portfolio by investing in a mixture of financial assets. This can include stocks, bonds, mutual funds, exchange-traded funds (ETFs) and real estate.

You should also diversify within each type of financial asset. For example, avoid choosing all technology stocks, for example.

Usually, as you get older, it’s a good idea to become more conservative in your investing. If you have mostly a stock-based portfolio, you may want to increase the percentage of fixed-income securities, such as bonds. You may even want to invest in some real, tangible assets like real estate.

However, remember that if you gradually shift your portfolio toward more conservative assets, your returns may be lower than those on riskier investments.

Step 6: Consider Buying Long-Term Care Insurance

As you approach age 60, consider buying long-term care insurance. No one knows what the future holds, and many parents don’t want to risk their children having to care for them. If you invest in long-term care insurance, you may be able to care for yourself and still leave something for your beneficiaries.

Be sure to compare quotes from several insurance companies. Make sure you understand what a long-term care policy costs and what it will buy for you. At a minimum, choose a policy with financial support for nursing home care, assisted-living care and in-home care.

How Can an Advisor Help You Create a Plan to Retire at 67?

Retiring at 67 aligns with the full Social Security retirement age for most people. This makes it one of the more strategically advantageous times to retire. A financial advisor can help you use that timing to plan each aspect of your financial life.

Savings

An advisor will start by helping you determine exactly how much you need to save. Rather than using general rules of thumb, they build a personalized projection based on your expected expenses, lifestyle goals and income sources. This gives you a concrete savings target to work toward rather than an abstract number pulled from a generic calculator.

Social Security

Social Security optimization is one of the most valuable things an advisor can offer. Claiming at 67 may align with your full retirement age. However, an advisor will model the long-term income difference between claiming immediately versus delaying even a year or two to maximize your monthly benefit.

For married couples, coordinating both spouses’ claiming strategies can result in significantly more lifetime income.

Medicare

Medicare enrollment is another area where an advisor can prevent costly mistakes. Failing to enroll in Medicare Part B on time can trigger permanent premium penalties. An advisor will walk you through enrollment and help you evaluate supplemental coverage options. They can then you build realistic healthcare costs into your retirement budget.

Investments

On the investment side, an advisor will help you shift your portfolio appropriately as retirement approaches.

A portfolio that worked well during your accumulation years may carry too much risk for the distribution phase. An advisor will rebalance your holdings to generate reliable income while maintaining enough growth to combat inflation for 20 or more years of retirement.

Taxes

Tax strategy becomes especially important around retirement age. An advisor can identify opportunities to do Roth conversions in the years before Social Security and RMDs begin. This helps lower your taxable income later. They will also sequence your withdrawals across taxable, tax-deferred and Roth accounts to minimize what you owe each year.

Long-Term Care Planning

Long-term care planning is a critical but often overlooked piece of retiring at 67. An advisor will help you evaluate whether long-term care insurance makes sense. Together, you can compare policy options to determine how potential care costs will affect your overall retirement plan.

Without a plan for this possibility, a single need can significantly deplete even a well-funded retirement portfolio.

Bottom Line

Retiring at 67 is a milestone that requires careful planning and strategic execution. By understanding your financial needs and setting realistic goals, you can create a roadmap that ensures a comfortable retirement. To do this, assess your current financial situation, including savings, investments and any outstanding debts, with a financial advisor. This will help you determine how much you need to save to maintain your desired lifestyle.

Tips on Retirement

• A financial advisor can help you make a plan to be ready for retirement at 67. 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.
• SmartAsset’s inflation calculator will help you determine the purchasing power of your retirement savings over time for your planning purposes.

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