How to Retire at 60

To give your money time to grow, start your retirement savings early.
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Early retirement allows you to travel, explore hobbies and pamper your grandchildren for a longer period of time. Many couples plan a retirement date with Social Security in mind, which means they must wait until after 60 to receive their full benefits. Retiring at 60 requires additional planning and an understanding of the retirement withdrawal rules. When you retire early, you will need additional sources of income beyond Medicare and Social Security, such as drawing on your IRA, 401(k) or other investment vehicles.


Complete a budget of your fixed and discretionary expenses in retirement. By knowing your outflow, you can easily estimate the amount of money you need to retire at 60. It is best to consider how much money you need to get through the next 25 to 30 years. The Society of Actuaries estimates that females have a 50 percent chance of seeing age 85, while men have a 40 percent chance. Formulas for how much money you should have saved up vary by financial expert. According to an article on Time Business & Money website, BTN Research "estimates that, assuming 5% average annual investment returns, for every $1,000 of monthly income you want over a 30-year retirement, you need $269,000 in the bank." A lot depends on your debt level and individual needs. The important thing is to save as much money as you can, which might mean forgoing certain luxuries during your working years if you want to retire early.

Retirement Accounts

You can draw on your 401(k) and IRA without early withdrawal penalties by the time you reach 60. Withdrawals on IRA earnings are penalty-free when you reach age 59-1/2, though you don't have to withdraw from an IRA until age 70-1/2. If you leave your job during the calendar year you turn 55 or later, you can take your 401(k) without having to pay the 10 percent early withdrawal penalty.

Other Sources of Income

Don’t forget to factor in your other sources of income besides retirement accounts. These might include rental property you own, spousal income and investment income. Other income should figure into your monthly budget, easing the burden of drawing on your retirement accounts. Wait as long as you can to start tapping your retirement accounts. The longer it sits and compounds, the more you will have saved when the time comes to draw on it.

Health Insurance

During your planning stage, make sure to account for health insurance. As of 2013, retiring at 60 means you face five more years of health insurance premiums until Medicare eligibility begins. Medicare does not kick in until age 65. Starting in 2014, you must have health insurance or face additional penalties. According to, the minimum penalty per person will start at $95 in 2014 and rise to $325 the following year. Starting in 2017, the minimum tax per person will rise each year with inflation.

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