Can you retire at 62 with $500k?

With $500k at age 62, you can safely spend about $22,500/year after tax ($1,875/month) without running out over a ~33-year retirement — about a 4.5% withdrawal rate, a touch above the classic 4% rule, which a shorter horizon like this can support. Whether that's enough comes down to your lifestyle; here's the full picture.

How long $500k lasts at different spending levels

The 4% rule is a starting point, not a guarantee — especially retiring at 62, when the money may need to last 33+ years. Here's what $500k supports, spending from age 62 to 95 at a 6% nominal return and 3% inflation:

Why the answer isn't just $500k × 4%

A back-of-envelope "$500k × 4% = $20,000" overstates what you can safely spend at 62, for two reasons this projection captures:

• Taxes. A dollar in a traditional 401(k) or IRA is taxed as ordinary income on the way out; taxable-brokerage gains are taxed too. Only Roth and cash are tax-free. So the safe spendable figure ($22,500) sits below the headline 4% draw.
• A long horizon. Retiring at 62 can mean 33+ years in retirement. The 4% rule was calibrated to about 30 years — stretch it further and a lower rate (nearer 4.5% here) is what actually survives a bad early market.

The portfolio, year by year

Spending the sustainable $22,500/yr from $500k at age 62, here's how the portfolio holds up in today's dollars (inflation-adjusted, so it reflects real spending power):

Assumptions: single filer, TX (no state income tax), 60% taxable / 30% traditional / 10% Roth split, 6% nominal return, 3% inflation, no Social Security. Add Social Security, a pension, part-time income, or a spouse in the calculator and the safe number rises — often substantially.

How claiming at sixty-two changes the job of the pot

At sixty-two, Social Security becomes available for the first time, and that single fact reframes a modest portfolio. Instead of funding the entire retirement on its own, the pot can shift into a supporting role behind a stream of guaranteed, inflation-adjusted income — a very different and more forgiving assignment.

The catch is the claiming tradeoff. Filing at sixty-two locks in a permanently reduced benefit; waiting lets it grow for each year you delay, up to seventy. If you can cover early spending from savings, delaying buys a larger lifetime floor. If health, job loss, or the need to preserve the portfolio pushes you to claim now, even the reduced benefit still does real work.

One caution if you keep working: claiming early while earning above the annual limit triggers the earnings test, which temporarily withholds part of the benefit. The real question is less the exact break-even age and more which risk you would rather carry — running the pot down early, or living a long time on a smaller check.

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