Sixty is a popular finish line. It is young enough to enjoy a long retirement and old enough that a 401(k) has had decades to grow. But ask how much you need to retire at 60 and you usually get one number, often 25 times your spending, as if Social Security, health insurance and a 35-year retirement worked the same at 60 as at 67.
They do not. Retiring at 60 means paying your own way for at least two years before Social Security can start, and for five years before Medicare does. Those years cost real money, and a quick rule of thumb hides them.
This guide splits your number into the two amounts that actually decide it, with one couple's math worked out line by line.
The short answer: Most people retiring at 60 need two amounts: a bridge fund that covers full spending until Social Security starts (no earlier than 62) plus health insurance until Medicare at 65, and a lifetime fund of about 25 to 30 times the yearly gap Social Security leaves. For one illustrative couple spending $72,000 a year, that comes to about $1.12 million.
How much do you need to retire at 60?
You need enough to cover every dollar of spending from 60 until Social Security begins, plus health insurance until Medicare starts at 65, plus a portfolio large enough to fill whatever gap Social Security leaves for the rest of your life. Add those three pieces and you have your number.
The popular shortcuts are a starting point, not an answer:
- 25 times spending (the 4% rule). Divide what your savings must provide each year by 0.04. That rule was built for a 30-year retirement. Morningstar's 2025 research puts the highest starting withdrawal rate with a 90% chance of the money lasting at 3.9% for a 30-year retirement, and its early-retirement analysis puts it at 3.5% for 35 years and 3.3% for 40. These are model estimates, not guarantees. Someone retiring at 60 who plans to live into their late 90s needs closer to 28 to 30 times.
- 8 times your salary by 60. Fidelity's guideline is a checkpoint for people who keep working until 67. It assumes savings provide about 45% of pre-retirement income, with Social Security covering much of the rest.
Both rules skip the part that makes 60 different: the bridge years.
Why does retiring at 60 take more money than retiring at 67?
Three gaps open up when you leave work at 60, and each one is paid from your own savings.
- The Social Security gap. According to the Social Security Administration, you can start retirement benefits as early as age 62. For anyone born in 1960 or later, full retirement age is 67, and claiming at 62 cuts the monthly check by 30% for life. Waiting past 67 adds 8% a year until age 70.
- The Medicare gap. Medicare is health insurance for people 65 or older. From 60 to 65, coverage usually comes from COBRA, a retiree plan from your former employer, a working spouse's plan, the marketplace or, at low incomes, Medicaid.
- The longevity gap. A retirement that starts at 60 can last 35 to 40 years, and a longer horizon means a lower safe withdrawal rate, as the Morningstar figures above show.
How big is Social Security for a typical retiree? In September 2026 the average retired worker received $2,088.79 a month, about $25,065 a year, according to SSA's monthly statistical snapshot. Your own estimates at 62, 67 and 70 are on your Social Security statement.
How do you pay for health insurance from 60 to 65?
Early retirees usually choose among a few routes, and the cost is easy to leave out.
- COBRA. Federal law lets you keep your employer's plan, generally for up to 18 months after you leave the job, but you may pay the entire premium, up to 102% of the plan's cost (U.S. Department of Labor). Retire at 60 and COBRA usually runs out at about 61 and a half.
- The ACA marketplace. KFF puts the 2026 national average unsubsidized premium for a 60-year-old at $15,914 a year for a benchmark silver plan, or $11,625 for the lowest-cost bronze plan. The enhanced premium tax credits expired at the end of 2025, and enrollees with incomes above 400% of the federal poverty level are no longer eligible for any assistance.
- A working spouse's plan, if one of you keeps working a few more years.
Because marketplace help depends on income, how you draw from your accounts in the bridge years can change what you pay. That is worth a conversation with a tax professional before you hand in your notice. If you are still saving, the same thinking applies to which accounts you fill: our guide to Roth IRA vs traditional IRA shows how your tax rate now and in retirement decides it.
How to find your retire-at-60 number in 5 steps
- Write down your yearly spending in retirement, including taxes and Medicare premiums after 65. Last year's actual spending is the best starting point; our guide on how to make a budget for beginners shows how to find it.
- Price health insurance from 60 to 65 for each person, separately from everything else.
- Pick a Social Security claiming age and look up your estimated benefit at that age.
- Add up the bridge: full spending for every year between retiring and claiming, plus the health insurance from step 2.
- Fund the lifetime gap: subtract Social Security and any pension from your yearly spending, then divide what is left by a withdrawal rate that matches how long the money must last (3.9% for 30 years, 3.5% for 35).
The bridge plus the lifetime fund is your number. Our retirement readiness calculator is a quick way to test it.
A worked example: Teresa and Glenn
Teresa and Glenn are both 59 and want to retire next year at 60. They were born in 1967, so their full retirement age is 67. These figures are illustrative, in today's dollars, and assume the bridge money roughly keeps pace with inflation. Use your own numbers.
What they know:
- Spending, including taxes and Medicare premiums after 65: $72,000 a year
- Social Security at 67: $2,600 a month for Glenn and $1,900 for Teresa, so $4,500 a month or $54,000 a year combined
- Social Security at 62: 70% of that, or $37,800 a year
- Marketplace health insurance from 60 to 65: $15,914 × 2 = $31,828 a year, using KFF's 2026 average for a 60-year-old (this uses the age-60 price for all five years; because marketplace premiums rise with age, the real five-year cost would be roughly $168,000 at 2026 prices)
Plan A: claim at 67
- Bridge spending, 60 to 67: $72,000 × 7 = $504,000
- Health insurance, 60 to 65: $31,828 × 5 = $159,140
- Lifetime gap from 67: $72,000 − $54,000 = $18,000 a year. At 3.9% for 30 years (to age 97): $18,000 ÷ 0.039 = $461,538
- Total: $504,000 + $159,140 + $461,538 = $1,124,678, about $1.12 million
Plan B: claim at 62
- Bridge spending, 60 to 62: $72,000 × 2 = $144,000
- Health insurance, 60 to 65: $159,140
- Lifetime gap from 62: $72,000 − $37,800 = $34,200 a year. At 3.5% for 35 years (to age 97): $34,200 ÷ 0.035 = $977,143
- Total: $144,000 + $159,140 + $977,143 = $1,280,283, about $1.28 million
Claiming early feels safer because the checks start sooner, but here it raises the savings target by $155,605 ($1,280,283 − $1,124,678). Plan A does ask them to spend about half a million dollars in seven years, so it is worth asking a licensed investment professional how much market risk that money can take.
Compare both with the rule of thumb: 25 × $72,000 = $1,800,000. It ignores Social Security, so it overstates their need, and it still leaves out health insurance.
Should you claim Social Security at 62 if you retire at 60?
Not automatically. Claiming at 62 shortens the bridge but locks in a check 30% smaller for life, so the lifetime fund has to be bigger. Waiting until 67, or until 70 for 8% more for each year past full retirement age, does the opposite: a longer bridge and a smaller gap.
The right choice depends on your health, your savings and, for couples, which of you has the larger benefit. Our guide on when to take Social Security works through the break-even ages for 62, 67 and 70, and our guide to retirement planning for women explains how spousal and survivor benefits factor into that decision.
Are you in Canada? Here is what changes
The two-bucket method works the same way, but the pieces differ.
- CPP can start at 60. Canada.ca says you can start the Canada Pension Plan as early as 60 or as late as 70. Starting at 60 reduces payments by 0.6% a month, up to 36%; waiting past 65 raises them by 0.7% a month, up to 42% at 70.
- OAS starts at 65. You must be 65 or older and have lived in Canada for at least 10 years since age 18.
- No health insurance bridge. Provincial plans cover medically necessary hospital and physician services based on need, not on whether you work. Prescription drugs, dental and vision care are not universally covered, so price a private plan if you lose workplace benefits.
A Canadian bridge fund is mostly spending, not insurance, and the CPP decision mirrors the Social Security one.
5 mistakes people make when planning to retire at 60
- Using 8 times salary as the target. Fidelity's checkpoint assumes you keep working until 67.
- Applying 25 times to total spending. It ignores Social Security, so it can overstate what you need while still skipping health insurance.
- Leaving out health insurance before 65. For a couple, the 2026 marketplace average without subsidies is $31,828 a year.
- Claiming at 62 by default. A smaller check for life can cost more in savings than it saves.
- Using a 30-year withdrawal rate for a 35-year retirement. Morningstar puts 35 years at 3.5%, not 3.9%.
Your next step
Tonight, find three numbers: last year's total spending, your Social Security estimates at 62 and 67, and a marketplace quote for your age. Run them through the five steps above and you will have a first draft of your number, which is far more useful than anyone's rule of thumb. To see how your savings so far compare with others your age, check the average 401(k) balance by age. Keep a cash cushion as well; our guide on how much should be in an emergency fund explains how retirees size theirs.
If you would like help turning it into a plan, KAV Solutions offers a complimentary Financial Need Analysis. A licensed insurance professional walks through your spending, your Social Security options and the bridge years before Medicare with you. The analysis is free and you never pay KAV a fee. If you choose to buy a policy, the insurer pays the professional a commission.
Frequently asked questions
Is $1 million enough to retire at 60?
It can be, depending on your spending and Social Security. At Morningstar's 3.5% starting rate for a 35-year retirement, $1 million supports about $35,000 a year on its own. But the bridge years before Social Security and health insurance until Medicare at 65 come out of the same pot, so subtract those first.
Can I retire at 60 with $500,000?
Possibly, if your spending is modest and Social Security will cover most of it. At a 3.5% starting rate, $500,000 supports about $17,500 a year. The average retired worker's benefit was $2,088.79 a month in September 2026, but nothing arrives before 62, so the bridge years can drain a smaller balance quickly.
Can I get Social Security if I retire at 60?
Not at 60. The earliest age to claim retirement benefits is 62. For anyone born in 1960 or later, claiming at 62 reduces the benefit by 30% compared with waiting until full retirement age at 67, and each year you wait past 67 adds 8% until age 70.
How do I get health insurance if I retire at 60?
Common options are COBRA, which generally lasts up to 18 months at up to 102% of the plan's cost, and an ACA marketplace plan until Medicare starts at 65. In 2026 the average unsubsidized benchmark silver premium for a 60-year-old is $15,914 a year, according to KFF.
Can I take money from my 401(k) at 60 without a penalty?
Yes. The IRS 10% additional tax applies to most withdrawals before age 59½, so at 60 you can take money from an IRA, or from a 401(k) under your plan's withdrawal rules, without it. Regular income tax still applies to pre-tax money. Retiring at 55 instead? Leaving a job in or after the year you turn 55 exempts that employer's 401(k), but not an IRA.
How much do I need to retire at 60 in Canada?
Use the same two-bucket method with Canadian numbers. CPP can start at 60 with a 36% reduction, OAS starts at 65, and provincial plans cover medically necessary hospital and physician care whether or not you work, so the bridge fund mostly covers spending rather than health insurance.
KAV Solutions is a women-led team of licensed insurance professionals based in Pennsylvania. This article is general education, not individualized financial, tax, or legal advice. Social Security, Medicare, marketplace and CPP rules and amounts change every year.
