Can I Retire at 62 With $1.8 Million? One Couple's Real Numbers.

Retiring at 62 with $1.8 million usually works, if the plan can bend, and that's a real if. For a couple spending around $75,000 a year, the margin is thinner than the balance suggests. That $75,000 is a 4.2% withdrawal rate, a touch above what most research calls a safe starting point, and retiring at 62 adds three years of health insurance to buy before Medicare, a big Social Security decision, and the danger of drawing money out while markets fall.

So the real question isn't whether the number is big enough. It's whether the plan around the number can take a punch. The video below walks through a couple in exactly this spot, and the sections after it carry their numbers all the way through with 2026 figures.

▶ Video: youtube.com/watch?v=e4W36dxADso, “I'm 62 and Have $1.8 Million Saved. Can I Retire Early?”

Watch: Patrick Shope on whether $1.8 million is enough to retire at 62.

Walt and Denise: two resignation letters and $1.8 million

Let me introduce a composite couple we'll call Walt and Denise. They're both 62, they've saved about $1.8 million between their accounts, and they'd like to stop working now. They figure they need roughly $75,000 a year to cover their normal spending, some travel while they're still healthy, and health insurance until Medicare starts at 65.

On paper this looks fine. But "looks fine on paper" and "holds up through a bad decade" are two different things. Let's take their numbers one factor at a time.

Factor 1: Is a 4.2% withdrawal rate sustainable?

Start with the math that everybody does first. $75,000 out of $1.8 million is a 4.2% withdrawal rate in year one. The classic 4% rule, which William Bengen published back in 1994, found that a 4% initial withdrawal adjusted for inflation survived every 30-year historical period he tested (Source: William Bengen, "Determining Withdrawal Rates Using Historical Data," Journal of Financial Planning, 1994). Four percent of $1.8 million is $72,000. Walt and Denise want $75,000, so they're already about $3,000 a year above that old benchmark.

More recent research suggests a lower starting figure, closer to 3.9%, is safer for a 30-year retirement when spending stays fixed (Source: Morningstar, "The State of Retirement Income," 2025). At 3.9%, they'd be looking at about $70,200 a year, roughly $4,800 below what they want to spend. Here's the thing though: the 4% rule assumed 30 years. Retire at 62 and you might be planning for 35 or even 40. A longer retirement wants a lower starting rate, not a higher one.

None of this makes 4.2% reckless. It makes it a number that needs a backup plan, which is a theme you'll see repeat below.

Factor 2: Social Security at 62 versus 67

This is where a lot of early-retirement money quietly walks out the door. Say Walt and Denise would each collect about $2,800 a month if they waited until their full retirement age of 67. Claiming at 62 instead permanently cuts that by roughly 30%, down to about $1,960 each.

Let me show you what that costs. That's $840 a month less per person, $1,680 a month for the household, or a little over $20,000 a year, for the rest of both their lives. Twenty thousand a year is real money against a $75,000 budget.

But there's an opportunity cost on the other side too. Those five years from 62 to 67 come with health, energy, and time you can't buy back later. The right move depends on your health, your other income, and, honestly, what you plan to do with the years. I've watched couples delay to 70 for a bigger check and I've watched couples claim at 62 and never regret a day of it. If you want the full trade-off, we lay it out in our piece on when to claim Social Security. For Walt and Denise, the smart play is often to spend down some savings early and let at least one benefit grow.

Factor 3: The health insurance gap from 62 to 65

Medicare doesn't start until 65. So Walt and Denise need to buy private coverage for three full years, and this is the number people underestimate most.

In the video's example, unsubsidized marketplace coverage runs about $1,200 a month per person, or roughly $28,800 a year for the two of them. That's not a rounding error. That's nearly 40% of their entire $75,000 budget going to health insurance for three years straight.

Here's the part that surprises people. ACA marketplace subsidies are based on your taxable income, not your net worth. A couple with $1.8 million in accounts can still qualify for help if they keep their reported income low, say by living off cash and Roth dollars rather than pulling large taxable withdrawals. One catch for 2026: the enhanced subsidies expired at the end of 2025, so the old subsidy cliff is back. Earn one dollar over the limit and you can lose the subsidy entirely. That makes income planning in these gap years worth real attention.

Factor 4: The low-bracket tax window early retirees waste

Here's a factor that cuts the other way, in Walt and Denise's favor. Before Social Security and required distributions start, their taxable income can be unusually low. That opens a planning window.

Think about it this way. In 2026 a married couple's standard deduction is $32,200, and the 12% bracket runs up to $100,800 of taxable income. If Walt and Denise are living partly off savings, they may have lots of room to do partial Roth conversions at 12% instead of watching those traditional-IRA balances grow and get taxed harder later, once both Social Security checks and RMDs at 75 are flowing.

The tension is real, though. Every dollar of Roth conversion is a dollar of income that can shrink an ACA subsidy in these same years. And a conversion at 63 can raise Medicare premiums at 65, because Medicare looks back two years. So the tax window and the health-insurance window pull against each other, and you have to size the moves to thread both. This is exactly the kind of coordination a calculator can't do for you.

Factor 5: Sequence of returns risk, the one that decides it

Here's the factor that matters more than the size of the account. It's not whether markets average out over 30 years. It's what they do in the first few.

Say Walt and Denise retire and a 30% market drop hits in year one or two, while they're pulling out $75,000 plus that $28,800 in premiums. They're selling investments at low prices to fund living expenses, so those shares are gone before the recovery arrives. A portfolio that would've lasted 35 years with good early returns can run short with bad ones, even starting from $1.8 million.

This is sequence of returns risk, and early retirees carry more of it than anyone, because they have the longest runway and the fewest bailout options. The usual defense is holding a couple of years of spending in cash and short-term bonds so you never have to sell stocks into a downturn. We walk through exactly how that works in our post on sequence risk and the bucket strategy.

Factor 6: Flexibility is the whole ballgame

What if health costs spike? What if a bad market shows up early? Early retirees can't just work three more years to fix it, so flexibility has to be built in from day one.

For Walt and Denise, that might mean planning around $65,000 of spending instead of $75,000, with the extra $10,000 treated as travel and extras they'll trim in a down year. That single change drops their withdrawal rate from 4.2% to about 3.6%, right in line with the conservative research, and it does more for their odds than any clever investment move. Whether early retirement fits your temperament at all is a separate question we tackle in whether you should retire early.

The verdict: yes, if the plan can bend

So can Walt and Denise retire at 62 with $1.8 million? They're in a gray area, and I mean that honestly. If markets cooperate for the first decade, they'll very likely be fine. If a serious downturn hits early and they keep spending $75,000 rigidly, they could struggle. The difference isn't the balance. It's the flexibility around it.

The trouble with a calculator is that it answers one question at a time. Real life runs all six of these factors at once, and they interact. The right plan for Walt and Denise could be wrong for a couple with the identical balance but different Social Security timing or a different tolerance for cutting back. If you want to see where your own numbers land against these six factors, that's the conversation we have every week in our office. You can start that conversation with us and bring your real spending, not a round number.

The goal was never to retire as early as the math technically allows. It's to retire with a plan that still works when the first few years don't go your way. $1.8 million buys Walt and Denise options. What they do with those options decides everything.

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