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Once you turn 59½, you’re eligible to take penalty-free withdrawals from an IRA or 401(k). However, many people still opt to hold off on retirement for a number of years beyond that point.
If you’re burned out at work or are just plain ready for that next stage of life, then you may be eager to retire at 60 — and with decent savings and minimal to no debt, that may be possible.
For instance, a $750,000 nest egg at age 60 puts you well ahead of the average American aged 55 to 64. The Federal Reserve reports the median retirement account balance for this group is $185,000, with an average of $538,000. While $750,000 sets you up well for early retirement, challenges may arise, so a solid strategy is essential.
Retiring at 60 can be appealing, but it comes with challenges, like waiting until 62 to collect Social Security. Even then, filing early reduces your monthly benefit, and you’ll need to wait until 67 for the full payout.
Healthcare is another concern, as Medicare doesn’t kick in until age 65. Paying for private insurance in the interim can be costly, and COBRA benefits typically max out at 18 months, leaving a coverage gap.
To navigate these hurdles and create a sustainable plan that gives you a little more control over your golden years, consider working with a professional financial advisor – and Advisor.com can help you find a financial professional that’s right for you.
Advisor.com is a free online platform that connects you with vetted financial advisors. Just answer a few quick questions about yourself and your finances, and the platform will match you with experienced financial professionals best suited to help you develop a plan to achieve your financial goals.
There is also an accessible family office option for established investors with larger portfolios.
Retiring at 60 on $750,000 is doable, especially if you’re debt-free and stick to a budget. Following the 4% rule, you’d withdraw about $30,000 annually — but delaying Social Security until full retirement age may require additional income in the meantime. Filing early at 62 could help but would mean a reduced benefit of about 30%.
To bridge the gap, part-time work or flexible side hustles can supplement your income. A recent T. Rowe Price report shows that around 20% of retirees work in some capacity. You might also generate income by monetizing your home, such as renting out a finished basement or driveway space in high-demand areas.
Finally, how you invest your $750,000 will impact its longevity. A key principle to focus on would be low-risk, high-value assets like stable real estate investments, dividend stocks, or high-yield savings accounts.
Investing in real estate and its alternatives can be a powerful way to retire early, providing steady income and a hedge against inflation while reducing reliance on Social Security.
With accessible platforms, it’s easier than ever to add income-producing properties to your portfolio, regardless of your financial situation or expertise. You can tap into this market by investing in shares of vacation homes or rental properties through Arrived.
Backed by world-class investors including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.
To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100, potentially earning quarterly dividends.
The way you invest your $750,000 will help determine how long that money lasts. You don’t want to take on excess risk where you’re at the point of tapping your nest egg, so consider limiting stock holdings to 50% of your portfolio.
If you’re looking for expert advice, an investment research platform offering handpicked stock recommendations could be your solution.
Backed by former hedge fund analysts, Moby distills hours of research into clear, actionable stock reports.
Over the past four years, their picks have outperformed the S&P 500 by an impressive average of 11.95%, helping over five million users uncover winning investments. With a 30-day money-back guarantee, Moby simplifies investing and reduces guesswork.
You don’t always have to invest large sums to start. Ten dollars a week could make a difference – if you’re smart about what to do with your spare change.
Another low-cost way to put part of your nest egg to work is investing in exchange-traded funds through an app like Acorns.
Signing up for Acorns takes just minutes: link your cards, and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio. You can invest in an S&P 500 ETF with as little as $5 — and, if you sign up today, Acorns will add a $20 bonus to your account.
You can also customize your approach with Acorns Silver, which offers a 1% IRA match, or Acorns Gold, which includes a 3% IRA match and portfolio customization.
Make sure to keep at least one to two years’ worth of living costs in an emergency fund. This gives you access to money without having to risk taking a loss on investments.
Consider building some wiggle room into your annual budget for unexpected expenses. Over time, your home may need costly repairs, or health issues could leave you on the hook for higher-than-average medical bills.
To maintain a budget without the hassle of spreadsheets, consider an app that handles the details for you.
Monarch Money’s expense tracking system makes managing your budget easier. The platform seamlessly connects all your accounts in one place, giving you a clear view of where you’re overspending.
