Can You Retire At 62 With $400,000 In 401k? (2024) (2024)

FAQs

Can You Retire At 62 With $400,000 In 401k? (2024)? ›

Summary. While retiring on $400,000 is possible and above the average retirement savings, you may need to adjust your lifestyle expectations if this is your final retirement amount. If you want to retire early, $400,000 might be a difficult number to make stretch.

If you have $400,000 in the bank you can retire early at age 62, but it will be tight. The good news is that if you can keep working for just five more years, you are on track for a potentially quite comfortable retirement by full retirement age.

While the average retirement age is 61, some Americans choose to retire at 62. You need to save less than $1 million to retire at this age. The average American can't afford to retire at 62 comfortably. A financial advisor can help you plan your dream retirement and create a financial plan to get you there.

Summary. $3 million should be more than enough to fund your retirement, even if you choose to retire early. A number of factors are at play when determining how long $3 million will last, including your investment strategy and retirement lifestyle.

According to recently released data from the SSA's Office of the Actuary, just over 590,000 retired-worker beneficiaries were receiving $1,298.26 per month at age 62, as of December 2023. That compares to about 2.11 million aged 66 retired-worker beneficiaries who were taking home $1,739.92 per month.

Safe Withdrawal Rate

Using our portfolio of $400,000 and the 4% withdrawal rate, you could withdraw $16,000 annually from your retirement accounts and expect your money to last for at least 30 years. If, say, your Social Security checks are $2,000 monthly, you'd have a combined annual income in retirement of $40,000.

Early retirement

You can receive Social Security retirement benefits as early as age 62. However, we'll reduce your benefit if you start receiving benefits before your full retirement age. For example, if you turn age 62 in 2024, your benefit would be about 30% lower than it would be at your full retirement age of 67.

You Have the Chance to Enjoy it Longer

Compounding this is that the stress of work can actually contribute to health issues, so if you stop working sooner, you may remain healthier longer. No longer having to work means you have time to work on yourself!

The earliest you can start taking Social Security retirement benefits is 62. However, the Social Security Administration reduces benefits by 30% for people who retire at 62, meaning they receive just 70% of their full retirement benefit each month for life.

Is $500,000 enough to retire on at 62? ›

Most people in the U.S. retire with less than $1 million. $500,000 is a healthy nest egg to supplement Social Security and other income sources. Assuming a 4% withdrawal rate, $500,000 could provide $20,000/year of inflation-adjusted income.

If you will reach full retirement age in 2024, the limit on your earnings for the months before full retirement age is $59,520. Starting with the month you reach full retirement age, there is no limit on how much you can earn and still receive your benefits.

You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefits. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.

While retiring on $400,000 is possible and above the average retirement savings, you may need to adjust your lifestyle expectations if this is your final retirement amount. If you want to retire early, $400,000 might be a difficult number to make stretch.

Starting with the month you reach full retirement age, there is no limit on how much you can earn and still receive your benefits.