5 Key Signs You’ll Be Able To Retire at Age 62, According to Experts

Angela Mae
courtneyk / Getty Images
courtneyk / Getty Images

In the United States, the average retirement age is 62 years old, according to a 2024 MassMutual study. But not everyone can retire at that age, even if they want to. Not only is everyone’s path to retirement unique, but some people simply aren’t financially — or emotionally — prepared to leave their career behind and launch into retirement.

Of course, if you do want to retire at 62 — or at any specific point in your life — there are a few signs that you’ll be able to do so. Here are the big ones, according to experts.

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You’ve Got 2 or More Income Streams

In retirement, many people rely on Social Security. But you’re more likely to weather any financial challenges that come your way with more than one source of income. If you’ve got that covered, you could be ready to retire when you want to.

“If you have at least two reliable sources of income that can comfortably cover your essential expenses, that’s a good sign that you’re financially secure enough to retire early,” said Erika Kullberg, an attorney, personal finance expert and founder of Erika.com. “Whether that’s across Social Security, pension or investments and savings, this income should be consistent and reliable, and comfortably cover rent/mortgage, food, healthcare and any other essential costs.”

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You Can Live on 4% of Your Investments

Having multiple income streams that can replace your regular paycheck is important, but if you can also live on your investments throughout your retirement years, that’s a good sign, too.

“With multiple income streams, it suggests that you have enough to replace what would be your paycheck,” said Joe F. Schmitz Jr., founder and CEO of Peak Retirement Planning. “This is a very common thing to hear, but if you can withdraw 4% a year from your retirement accounts, then you are in a good spot.”

Say you have $2 million in total retirement savings and investments. Following the 4% rule, this would give you roughly $80,000 a year to live on (not accounting for inflation or unforeseen costs). Run the numbers to see if you have enough to sustain you throughout your retirement.

You Have Enough To Support You for 20 or More Years

Another sign that you’re ready for retirement at 62 is that you have enough retirement savings to last you at least 20 years — or however long you expect to live.

“If you’ve got retirement accounts (IRA, 401(k) or other investments) that are well-funded and can provide enough to supplement your income over a long period of time, you’re in good shape,” said Kullberg. “A general rule is to have enough savings to support you for 25-30 years, factoring in inflation and the potential for expensive healthcare costs.”

You Don’t Have Any Debt

Retiring with debt is generally not the best idea, but if you’re debt-free (or very nearly there), that’s a potentially good sign.

“Entering [retirement] with little to no debt, particularly from a mortgage or credit card, just brings so much more flexibility,” said Kullberg. “Not to mention the reduction of financial pressure and mental and emotional stress. Being debt-free also allows you to get honest value out of your savings and hard-earned pension, without the burden of large debt payments.”

You Have a Long-Term Plan

If you’ve considered all possible outcomes, run the calculations and created a sound financial plan that covers not just the immediate future but the next multiple decades, you could be on track to retire.

Ask yourself whether or not you have an actual retirement income distribution and preservation plan. Chances are you’re going to need one.

“My first answer is to have an actual plan that goes into effect at age 62,” said Steven Charlton, certified financial fiduciary and founder of Wisdom Financial. “You should start planning at the age of 30 or 40, allowing the maximum opportunity of achieving financial success because you’re looking at the end and building it for the end, not just for today.”

Charlton gave several suggestions for what you should have figured out before retiring. The first is knowing what your guaranteed income streams will look like when you turn 62 and beyond. Again, plan to have enough income to last between 20 and 30 years. Make sure you understand where those income sources are coming from and how they’ll be taxed. And don’t forget to have a set monthly budget.

Your plan should also account for — and control — risks as much as possible. This includes:

  • Sequence and returns risk (volatility): This “requires a volatility buffer to be able to have protected assets that can be leveraged to distribute from during years of market downturns,” Charlton said. “Withdrawing from a market-based asset when the market is down causes too much disintermediation.”

  • Tax risk: “Finding out what their tax diversification index looks like to see if leveraging Roth conversions or 7702 planning makes sense,” said Charlton.

  • Longevity risk: “People are living longer today, and the older they get, the greater all of these risks compound,” said Charlton. “Most spend 80% of their money in the last two years of their lives.” If you don’t prepare for this one (and this includes long-term care), you could wind up financially devastated.

  • Fee and inflation risk: “These are actually the two biggest risks that all retirees have to deal with as they erode a tremendous amount of their assets to pay for things that they do not need to pay for,” said Charlton. “Inflation-proofing a plan is key to success.”

Last but not least, ask yourself if you’ve got a plan for healthcare and medications. This could mean creating a separate fund to cover these things. Worst-case scenario, you have it when you need it. Best case, you don’t end up using it and have something more to leave behind for your heirs.

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