How much do you need to retire at 62?
To retire at age 62 and spend about $60,000/year after tax ($5,000/month) without running out over a ~33-year retirement, you'd need roughly $1,320,000 invested — about 22× your annual spending. The exact figure depends on how much you spend; here's the full breakdown.
The nest egg you need at 62, by spending level
How much you need scales with how much you spend. Retiring at 62 (a ~33-year horizon), 6% nominal return, 3% inflation, no Social Security:
| Spend / yr | Spend / mo | You need about |
|---|---|---|
| $40,000 | $3,333 | $880,000 |
| $50,000 | $4,167 | $1,110,000 |
| $60,000 | $5,000 | $1,320,000 |
| $80,000 | $6,667 | $1,780,000 |
| $100,000 | $8,333 | $2,260,000 |
Why it's more than 25× your spending
The classic "multiply your spending by 25" rule assumes a 4% withdrawal and a 30-year retirement. Retiring at 62 stretches the horizon to 33+ years, and — crucially — the rule ignores taxes. Because withdrawals from a traditional 401(k) are taxed as ordinary income, you need a larger pre-tax balance to net a given amount of spendable cash. That's why the figures above land above a naive 25× estimate.
Two levers cut the number substantially: Social Security (inflation-adjusted lifetime income that shrinks what you draw from the portfolio) and a paid-off home (lower fixed spending). Neither is in the baseline above — add them in the calculator and the required nest egg often drops sharply.
The claim-now-or-wait tradeoff at 62
62 is the first year Social Security can be claimed, and that one decision moves the required nest egg more than almost anything else at this age. Claiming now starts income immediately, so the portfolio covers less each year — but it locks in the smallest benefit for life. Waiting toward full retirement age, or all the way to 70, produces a larger, inflation-adjusted check that permanently reduces what savings must provide.
The nest egg you need is essentially the mirror image of that choice: a bigger future benefit means a smaller long-run portfolio, but a longer bridge to fund in the meantime.
- If you claim early while still working, an earnings test can temporarily withhold part of the benefit.
- Medicare is still three years away, so budget for ACA or COBRA coverage until 65.
Common questions
How much do I need to retire at 62?
To spend about $60,000/year after tax and not run out over a 33-year retirement, roughly $1,320,000. For $40,000/year you'd need about $880,000; for $100,000/year, about $2,260,000.
Is 25× my expenses enough to retire at 62?
Not quite, in this projection — retiring at 62 means a long 33-year horizon, and 25× ignores the taxes owed on traditional-account withdrawals. The figures here run somewhat above 25×. Social Security and lower fixed costs can close the gap.
Does this include taxes and inflation?
Yes. The nest-egg figures are the amount needed after the federal (and where relevant, state) tax on withdrawals, with spending rising each year for inflation.