Retire at 62 or 67: Which Makes More Sense?
Recommendation
Retire at 67 if longevity, portfolio survival, and lifetime Social Security maximisation matter most, the 30% larger SS check and 5 fewer years of withdrawals are the biggest single variables in retirement math. Retire at 62 only if you have ≥30× annual spending saved, decent health insurance arranged, and a strong personal reason (caregiving, health, burnout) not to wait.
What would flip the answer
| If this is true… | …lean toward | Why |
|---|---|---|
| Health is excellent and family history supports longevity | Retire at 67 (full retirement age) | Longer life means delayed SS pays off more. |
| Serious chronic illness diagnosed | Retire at 62 | Shorter horizon flips the break-even to earlier filing. |
| Portfolio less than 25× annual spending | Retire at 67 (full retirement age) | 5 extra working years plus 5 fewer drawdown years is huge. |
| Pension covers most of expenses | Retire at 62 | SS reduction matters less when not the primary income. |
| Spouse is younger and lower-earning | Retire at 67 (full retirement age) | Larger SS benefit becomes the surviving-spouse benefit. |
| Burnout / job dissatisfaction is severe | Retire at 62 | Quality of life has real, hard-to-quantify value. |
Worked example: $1.2M portfolio, $60k spending, $2,000/mo SS at 67
Retire at 62: SS reduced 30% to $1,400/mo. Portfolio must cover $43,200/yr for 5 years before SS starts, plus a larger gap forever after. 30-year success rate ~75%.
Retire at 67: 5 extra years of contributions ($30k+/yr) plus full $2,000/mo SS. 30-year success rate ~95%. The gap is the difference between 'comfortable retirement' and 'might run out at 88'.
The healthcare bridge
Retiring at 62 means 3 years of pre-Medicare health insurance, typically $700–$1,000/month per person at full ACA price. Premium tax credits cut this dramatically if you stay under 400% of the federal poverty line.
Frequently Asked Questions
- Is 'retiring early' the same as quitting work entirely?
- No. Many people 'retire' from a primary career at 62 and consult, freelance, or work part-time for 5–10 years. The hybrid hugely improves portfolio longevity.
- How does life expectancy factor in?
- If you live past 78, delayed SS wins on lifetime benefits. Average U.S. life expectancy at age 62 is 21+ more years (so 83+), favoring delay for most.
- Can I file at 67 but stop working at 65?
- Yes. Lots of retirees bridge with portfolio withdrawals for 2 years to capture the full SS benefit. Best of both worlds when finances allow it.
Related quick-reads
- Quick answerHow much do you need to retire at 55?
- Should I…?Roth vs Traditional 401(k): Which Should I Choose?
- Quick answerHow much should I have saved for retirement by age 30, 40, 50?
- Quick answerWhen can I start collecting Social Security?
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