You can retire when your savings and guaranteed income, such as Social Security and any pension, can pay for your spending for 30 years or more. A useful first check: once Social Security starts, the amount you’d draw from savings each year should be around 4% of your portfolio or less, the historical baseline from William Bengen’s 1994 study (see the safe withdrawal rate). The date you can pick depends on a handful of ages written into tax and benefit rules, and on how you’ll cover the years before Social Security and Medicare begin.
The ages that set your options
| Age | What changes |
|---|---|
| 50 | Catch-up contributions: in 2026, $8,000 more in a 401(k) and $1,100 more in an IRA |
| 55 | No 10% early tax on the 401(k) of an employer you leave in or after this year (50 for some public safety workers) |
| 59½ | The 10% early tax ends for all IRAs and workplace plans |
| 60 to 63 | Higher 401(k) catch-up: $11,250 instead of $8,000 in 2026 |
| 62 | Earliest Social Security, at 70% of the full benefit if you were born in 1960 or later |
| 65 | Medicare |
| 67 | Full Social Security retirement age for anyone born in 1960 or later |
| 70 | Largest Social Security benefit, 124% of full |
| 73 | Required minimum distributions begin |
Two of these catch people. The age-55 rule applies only to the plan of the job you leave, not to IRAs, so rolling that 401(k) into an IRA at 56 locks the money up again until 59½. And the 10% early tax can also be avoided at any age with a series of substantially equal payments, sometimes called a 72(t) plan, but you must keep taking the same calculated amount for years, so it suits only people who need a steady draw.
The trade-offs between claiming Social Security at 62, 67 and 70 are covered in our retirement advisor guide.
The test that actually decides the date
The ages tell you when money becomes available. Whether you can afford to stop is arithmetic:
- Your yearly spending in retirement. Start from what you spend now, not a percentage of salary.
- Minus guaranteed income. Social Security, a pension, rental income you expect to keep.
- Divided by your savings. The result is your withdrawal rate.
A couple spending $90,000 a year with $40,000 of Social Security between them needs $50,000 a year from savings. On $1.25 million that’s 4%. On $900,000 it’s about 5.6%, a rate Bengen called risky. Our guide to how much you can withdraw explains what moves that number.
Retiring early widens the gap. If you stop at 60 and wait until 67 to claim, the portfolio pays the whole bill for seven years, then much less once Social Security starts. That early stretch is also when a market fall does the most damage, the sequence-of-returns risk. A real plan models each year, not one average rate.
Yearly contribution limits for the last working years
Source: IRS, IR-2025-111 (November 13, 2025)
If the numbers come up short, the last few working years are the most powerful ones: the highest catch-up limits, the most compounding left on what you’ve already saved, and one fewer year of withdrawals for every year you keep working.
The bridge years before 65
Retiring before Medicare means buying your own health insurance. COBRA from your last employer is one option for a limited time. The other is a marketplace plan, where households with income between 100% and 400% of the federal poverty level qualify for a premium tax credit. That makes the income you choose to take, from Roth conversions, capital gains or IRA withdrawals, part of your health insurance bill. A good plan sets each year’s taxable income with the premium in view.
The bridge is also a question of which account pays. A taxable brokerage account, cash, or a 401(k) you can reach under the age-55 rule can cover the years before 59½ without the 10% early tax. When Medicare starts, read our guide to going on Medicare.
Working part-time while claiming early
If you claim Social Security before full retirement age and keep earning, the earnings test applies. In 2026 Social Security holds back $1 of benefits for every $2 of earnings above $24,480. In the year you reach full retirement age, it’s $1 for every $3 above $65,160, counting only months before that birthday. The money isn’t lost: at full retirement age your benefit is recalculated to credit the months withheld. But for anyone planning a few years of consulting, claiming early often buys less than it seems.
Common mistakes
- Picking a date from a rule of thumb. “You need $1 million” or “80% of your salary” says nothing about your spending, your Social Security or your taxes.
- Rolling the 401(k) too soon. At 55 to 59½, the old employer’s plan may be the only account you can tap without the 10% tax.
- Claiming Social Security at 62 by default. It’s permanent, and for married couples the higher earner’s choice also sets the survivor’s benefit.
- Leaving healthcare out of the budget. Premiums before 65, and the income that drives them, can be one of the largest costs of retiring early.
- Treating the date as all or nothing. A year of part-time work, or retiring in a year after a strong market rather than a weak one, can change the outcome more than another year of saving.
Questions to ask a planner
| Ask | A good answer includes |
|---|---|
| Can I retire at the age I want? | A year-by-year projection of spending, income and taxes to age 95 or later |
| What if markets fall in my first two years? | The same plan with a bad start, and what you’d change |
| Which account pays for the years before Social Security? | An order tied to taxes and early-withdrawal rules |
| How does my retirement income affect health insurance before 65? | The premium tax credit at your planned income |
| How are you paid, in dollars? | One figure, and no commissions on products |
When a fee-only advisor is worth it, and what it costs
Five to ten years before you’d like to stop is the most useful time to pay for a plan. There’s still time to save more, choose the date, and set up the tax years. A fee-only planner is paid by you, not by the annuity or insurance products often sold to people near retirement.
If you want an answer and will carry it out yourself, a one-time plan at a median $2,000 (middle half $845 to $3,600) is usually enough. Hourly planners charge a median $300 to check a plan you’ve built. Ongoing planning, at a median $4,500 a year, makes sense if you want help through the transition itself. Advisors who manage the investments usually charge about 1% of assets instead; see whether 1% is too much.
How to find one
Start with advisors for pre-retirees, the retirement planning specialty, or the pre-retiree audience page. If you have a pension, look at pension planning too. Every record in the public graph shows how the advisor is paid. Ask two or three for a sample year-by-year plan and a price in dollars, and choose the one who shows you the most about your own date.