Early Retirees Need $600,000-$1.7 Million to Replace $60,000 Income Before 62
Updated
Updated · Yahoo Finance · Aug 19
Early Retirees Need $600,000-$1.7 Million to Replace $60,000 Income Before 62
1 articles · Updated · Yahoo Finance · Aug 19
Summary
$60,000 in annual spending from age 55 to 62 requires about $1.714 million at a 3.5% yield, $1 million at 6%, or $600,000 at 10%, according to the report's bridge-portfolio math.
The gap exists because Social Security generally cannot start until 62, leaving seven years for a 55-year-old retiree to fund living costs without drawing down principal.
Traditional IRAs and 401(k)s usually trigger a 10% penalty before age 59½, so the bridge typically must come from taxable accounts, Roth contributions, the Rule of 55, or a 72(t) payment plan.
Claiming Social Security at 62 can permanently cut benefits by up to 30% versus full retirement age, meaning delaying benefits can reduce the portfolio size needed to bridge the gap.