Retire by age 60
How much do you need to retire at 60?
Estimate the portfolio needed to retire at 60, including spending, withdrawal-rate, healthcare, Social Security, and sequence-risk considerations.
Retiring at 60 is not one number. It is a funding problem with several clocks: your portfolio may need to support roughly 30–35 years, Medicare does not normally begin until 65, and Social Security cannot start before 62.
The fastest honest estimate starts with annual spending, divides by a planning withdrawal rate, and then separates income that begins later from expenses that begin immediately.
A practical starting range at age 60
The table below is a pre-tax illustration in today’s dollars. It does not include Social Security, a pension, taxes, fees, or one-time expenses.
| Planning withdrawal rate | Portfolio multiple | Portfolio target |
|---|---|---|
| 3% | 33.3× | $2,000,000 |
| 3.5% | 28.6× | $1,714,286 |
| 4% | 25.0× | $1,500,000 |
Build the spending number before the portfolio number
- Separate essential spending from discretionary spending you could reduce after a poor market year.
- Quote health coverage for the 5 years before Medicare rather than using a generic inflation estimate.
- Add taxes and account-access constraints; a $60,000 lifestyle may require more than $60,000 of gross withdrawals.
- List large irregular expenses such as vehicles, roofs, family support, and long trips outside the monthly budget.
Treat later income as a second phase
A pension or Social Security benefit can reduce the portfolio draw later, but it does not pay bills before it begins. Model the early bridge and the later steady state as two distinct phases.
For a quick steady-state estimate, subtract reliable annual income from annual spending and divide the remaining gap by the withdrawal rate. Then separately fund the years before that income begins.
The risk that matters most near the starting line
Poor returns in the first several years can do more damage than the same returns later because withdrawals remove shares before they recover. A lower starting rate, flexible discretionary spending, cash reserves, or optional earned income can create response capacity.
- Run at least 3%, 3.5%, and 4% rather than defending one answer.
- Test a 20% spending overrun and a market decline early in retirement.
- Write down the spending cut or income response you would actually use.
Frequently asked questions
- Is $1 million enough to retire at 60?
- At a 4% planning rate, $1 million supports an initial $40,000 portfolio withdrawal before taxes and fees. Whether that is enough depends on spending, healthcare, later income, flexibility, and the length of retirement.
- What withdrawal rate should someone retiring at 60 use?
- There is no universally safe rate. Longer horizons often motivate testing 3% to 3.5% alongside the historical 4% reference and considering flexible spending rules.
- Should Social Security be subtracted from annual spending?
- Only for the years in which the benefit is actually expected. Keep the pre-benefit bridge separate so later income is not incorrectly used to fund earlier years.
Keep planning
Educational illustration only — not financial, investment, tax, legal, medical, or insurance advice. Calculations use simplified assumptions and do not predict future returns or benefits.