Is $200,000 Enough to Retire at 62?

Let's look at what $200,000 actually provides in retirement income:

• The 4% rule: Withdraw 4% first year, adjust for inflation
• $200k at 4% = $8,000/year or $667/month
• This assumes a 30-year retirement
• At 62, you may need 35+ years of income
• Lower withdrawal rate (3-3.5%) may be more appropriate
• Clearly $667/month alone is not enough to live on

Social Security is likely your biggest income source at this savings level:

• Taking SS at 62 = 30% reduction from full retirement age (67)
• Average SS benefit at 62: ~$1,400/month (after reduction)
• Full retirement age (67) would be ~$2,000/month
• Delaying to 70 would be ~$2,480/month
• Combined with $200k: $1,400 + $667 = ~$2,067/month
• That's $24,800/year—tight but potentially workable

Healthcare from 62-65 is a major expense without Medicare:

• ACA marketplace: $500-1,500/month depending on age and location
• COBRA (if available): Often $1,000-2,000/month
• Private insurance: Similar to ACA without subsidies
• With low income, you may qualify for ACA subsidies
• Plan Roth conversions to manage ACA subsidy eligibility
• This alone could consume 25-50% of your retirement income

If $200k is your reality, here are ways to stretch it:

• Delay Social Security: Even 1-2 years helps significantly
• Geographic arbitrage: Move to lower cost area (rural, abroad)
• Downsize housing: Smaller home, no mortgage
• Part-time work: Even $10k/year reduces portfolio withdrawal
• Optimize taxes: Roth conversions during low-income years
• Minimize healthcare costs: ACA subsidies, HSA if possible

Full retirement at 62 with $200k is challenging. Consider:

• Semi-retirement: Work part-time doing something you enjoy
• Bridge job: Work until 65-67, then fully retire
• Gig economy: Flexible work (consulting, driving, etc.)
• Delay: Each year worked adds savings AND reduces years needed
• Phased retirement: Reduce hours gradually
• Start a small business: Turn hobby into income