How Much Do I Need to Retire at 60? A Guide to Calculating Your Retirement Number

The idea of retiring at 60 feels different from retiring at 65. It's a statement. It says, "I'm in control of my time." It’s a dream for many, but one that comes with a critical question: how much money do you actually need to make it a reality?

When I first started to wrap my head around this, I felt overwhelmed. The idea of "early" retirement seemed to imply I needed some magical, seven-figure number to make it work. And while the number is probably higher than you think, it's not impossible. The key is to shift your mindset and build a plan that accounts for the unique challenges and opportunities of retiring a little ahead of schedule.

Retiring at 60 means your money needs to last for a longer period—potentially 30 to 35 years or more. It also means you’re on your own for a few years before Social Security and Medicare kick in. Let’s break down the essential numbers and strategies you need to consider.

Step 1: Rethink the "Rule of Thumb"

Forget the generic "$1 million" target. A more personalized and realistic approach is to use the "multiple of income" guideline. This tells you how much you should have saved by a certain age relative to your salary. For a person aiming to retire at 60, financial institutions like Fidelity and T. Rowe Price suggest having about 8 to 11 times your pre-retirement salary saved up.

• Example: If you earn $100,000 per year, your target savings number for a comfortable retirement at 60 would be between $800,000 and $1.1 million.

This is a good starting point, but it's not the final answer. The exact number depends on your planned retirement lifestyle, and that's the next step.

Step 2: The New "4% Rule" for Early Retirement

The traditional 4% Rule—which suggests you can withdraw 4% of your savings each year—was designed for a 30-year retirement window. Since retiring at 60 means a longer timeline, you might need to be more conservative. Many financial advisors suggest a safe withdrawal rate of 3% to 3.5% for early retirees to ensure their money lasts.

Here's how that changes your magic number:

Total Savings Needed
Your Annual Retirement Number​/0.035

Let's say your desired annual retirement spending is $60,000. Using the 3.5% rule, your target savings number becomes:

$$Total \ Savings \ Needed = \frac{$60,000}{0.035} = $1,714,285$$

You can see how a slightly earlier retirement can significantly increase the amount you need to save.

Step 3: Tackle the Two Biggest Hurdles

Retiring at 60 introduces two major challenges that require careful planning: healthcare and Social Security. (Note: Below is based on general US context. It will be different in a different country but the general principle will be similar)

1. Bridging the Healthcare Gap (Ages 60-65)

This is the most critical and often overlooked part of early retirement planning. You can't get Medicare until age 65. That means you will need a plan to cover your medical costs for at least five years.

• Options: You can use COBRA from your last employer (for a limited time, and it's expensive), get coverage through your spouse's plan, or purchase a plan on the Affordable Care Act (ACA) marketplace.

• The Cost: The cost of an ACA plan can be significant without subsidies. According to a 2026 report from the Kaiser Family Foundation, average ACA premiums for a single person ranged from $381 to $507 per month, though these numbers can vary greatly based on location and income. You should budget a significant amount for these costs until Medicare eligibility.

2. The Social Security Decision

You can start taking Social Security benefits as early as age 62, but there’s a catch. Every year you take benefits before your full retirement age (which is 67 for those born in 1960 or later) permanently reduces your monthly check. For someone starting at age 62, the benefit is reduced by about 30%.

This is where a little patience can pay off. Waiting until 67 means a much larger monthly check for the rest of your life. For someone retiring at 60, the plan would be to live off your personal savings for the first few years, then tap into Social Security at a later, more financially advantageous age.

Retirement at 60: A Simple Checklist

Calculate Your Target: Use the 8-11x salary rule as a benchmark and the 3.5% withdrawal rule for a more precise number.

Budget for the "Early Years": Account for five years of healthcare costs and the period before you start Social Security.

Invest for Growth: Your portfolio needs to last longer. Ensure it's balanced for growth and stability.

Create a Withdrawal Strategy: Decide when you'll start drawing on your personal savings and when you'll activate your Social Security benefits.

Retiring at 60 isn’t just about having a pile of money; it's about having a thoughtful, well-researched strategy. It requires a deep understanding of your personal finances and a careful plan for the years before you become eligible for government benefits. By taking these steps, you can turn that dream into a safe and secure reality.

What's the biggest fear you have about retiring early? Share your thoughts or questions in the comments below.

Disclaimer:

This article is for informational purposes only and does not constitute financial advice. Please consult with a qualified financial advisor who can provide personalized guidance based on your individual circumstances.