How Much More You'll Need To Save for Retirement If Retiring at 62 vs. 70
If most workers are being honest, they’d love the chance to retire early. In fact, according to a 2026 survey by Parnassus Investments, 79% of millennials would like to retire early. At the same time, only 35% feel highly confident that it’ll be possible.
"Retiring at 62 instead of 70 isn't about giving up eight years of work, it's about saving roughly a half-million dollars in additional assets plus a lifetime pay cut of roughly 30% on Social Security benefits,” said Cody Schuiteboer, financial expert and president of Best Interest Financial.
Here’s a closer look at what the differences between retiring at 62 instead of 70 may mean for your finances.
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A Look at the Numbers
According to David Kon, founder and CEO of WealthFluent, here's what the math looks like using average Social Security benefits – roughly $18,000 a year if you claim at 62 and approximately $32,000 a year if you delay to 70.
Annual Spending: $40,000
Savings Needed at 62: approximately $550,000
Savings Needed at 70: approximately $200,000
Gap: approximately $350,000
Annual Spending: $60,000
Savings Needed at 62: approximately $1,050,000
Savings Needed at 70: approximately $700,000
Gap: approximately $350,000
Annual Spending: $80,000
Savings Needed at 62: approximately $1,550,000
Savings Needed at 70: approximately $1,200,000
Gap: approximately $350,000
Annual Spending: $100,000
Savings Needed at 62: approximately $2,050,000
Savings Needed at 70: approximately $1,700,000
Gap: approximately $350,000
“The roughly $350,000 difference across scenarios comes primarily from the Social Security timing gap, but the numbers above actually understate the full picture,” Kon explained. “A 20-year retirement, retiring at 70 and planning to 90, can support a slightly higher withdrawal rate than a 28-year one, which means those who retire at 70 may need meaningfully less in savings than the numbers suggest.”
A Look Into Healthcare Finances
“Retiring at 62 also means paying for private health insurance for three years until Medicare kicks in at 65,” said Brennan Kolar, financial analyst and founder of Atlas CPA Index. “Marketplace plans for a 62-year-old run $800 to $1,500 a month in 2026 before any income-based discounts. The three-year insurance bill alone is $30,000 to $50,000 on top of the spending plan.”
According to Kolar, the part that gets understated is what happens to the savings that don't get spent at 62.
“A portfolio split 60% stocks and 40% bonds has averaged about 7% a year over long stretches. That means $770,000 left alone in that mix grows to roughly $1.3 million over eight years,” he added.
A Look Into Finding Balance
“Many people think the difference between retiring at 62 versus 70 is just eight years of work,” said Cristina Wiebelt-Smith, certified public accountant (CPA) and senior wealth advisor at Gertsema Wealth Advisors. “Financially, it can be the difference between your investments supplementing your retirement and your investments carrying the entire load. Retiring earlier often means relying heavily on your portfolio for income, while delaying retirement can allow Social Security and continued investment growth to carry more of the load.”
Wiebelt-Smith added that there is a balance between enjoying life while you are young and healthy and giving your investments and Social Security enough time to grow so they can support your retirement years.
“Much of this assumes good health and the ability to work for another eight years,” Schuiteboer added. “The reality is that about 40% of Americans retire earlier than planned either due to health problems, unemployment or becoming caregivers. Which is why, when advising our clients, we ask them to plan as if they'll retire at 65 even if they want to delay until 70. The savings targets need to reflect the reality.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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