Retire Early Today if You Answer Yes to These 7 Questions
If you’ve saved seven figures and you’re in your late 50s or early 60s, you might be closer to retirement than you think. Most people chase an arbitrary target and ignore the real signals that matter. I’m Megan Ramshaw, CFP®, with MOKAN Wealth Management, and I’ve helped hundreds of self-made 401k and IRA millionaires retire earlier than they thought possible. Here’s the truth: It’s not about hitting some magic number, it’s about knowing whether your plan can support the life you want.
This guide covers seven clear signs that show you can afford to retire at 60. Some are financial, and some are mindset-driven. Together, they help you build a retirement income floor, reduce tax drag, and avoid selling assets at the worst time.
What you’ll learn:
- Why low fixed costs beat a big portfolio
- How Social Security or a pension can cover your basics
- The power of tax diversification
- The mindset shift from money to time
- Smart ways to bridge health care from 60 to 65
- How to stress test for market storms
- The 3 to 4 percent spending rule, applied to your life
Sign 1: Your Fixed Costs Are Low and Your Home Is Paid Off
Why Fixed Costs Matter More Than Portfolio Size
I’ve seen families with $3 million who are scared to retire, and others with $1.5 million who retire confidently at 58. The difference is fixed costs, not total savings. When your home is paid off and your non-negotiable bills are low, your portfolio carries a lighter load.
Fixed costs create a retirement income floor. That floor makes your spending more sustainable and gives you the flexibility to adjust during market downturns. Recent research shows retirees with lower fixed expenses report higher life satisfaction and sleep better at night.
Practical Tip: Check Your Numbers
Aim for fixed costs around 30 to 40 percent of total spending, not 60 to 70 percent. Review:
- Home mortgage status and timeline to payoff
- Car loans
- Property taxes, insurance, and utilities
If those are under control, you’re building a sustainable baseline.
Sign 2: Social Security or Pension Income Covers Your Basic Lifestyle Needs
The Retirement Income Floor Concept
When guaranteed income pays for your essentials, your portfolio funds the fun. Housing, utilities, insurance, groceries, and health care should be covered by Social Security or a pension. This reduces your portfolio’s job from covering everything to just discretionary spending. That helps you avoid selling investments in bad markets just to keep the lights on.
Typical Scenario Walkthrough
Say you and your spouse expect $4,500 per month combined from Social Security once you both claim. Your baseline needs total about $4,000 per month. You’re covered. Now your portfolio only pays for travel, hobbies, gifts, and extras.
The Social Security Administration shows that an optimal claiming strategy can increase lifetime benefits by 30 percent or more. Many people assume they must work to 65 to make it work. In real plans, claiming at 62 or 63, paired with strategic withdrawals, often creates more tax efficiency and lets you retire 3 years sooner.
Make It Work for You
- Run a detailed claiming analysis that looks at both spouses, taxes, and longevity.
- Combine claiming with tax-smart withdrawals to preserve assets and retire earlier.
If your guaranteed income covers most, or all, of your basics, early retirement is realistic. For a tailored analysis, schedule a free Retirement Clarity Call.
Sign 3: You Have Tax Diversification Across Pre-Tax, Roth, and After-Tax Accounts
Client Stories: Dave vs. Susan
Dave saved $2.3 million, all in a pre-tax 401k. Every withdrawal was taxed as ordinary income. Projections showed his required minimum distributions at 73 would push him into higher tax brackets and increase Medicare premiums through IRMAA. He was set to pay more tax than necessary.
Susan had $1.8 million total, split across accounts: $1 million in a traditional IRA, $500,000 in Roth accounts, and $300,000 in a taxable brokerage account. She had options. Tax diversification means choosing where to pull from based on your tax picture each year.
How It Works in Practice
- In low-income years, draw from traditional IRAs to fill lower tax brackets.
- In higher-income years, pull from Roth accounts tax-free, or convert pre-tax dollars to Roth.
- For liquidity with favorable rates, use taxable accounts where long-term capital gains may apply.
Morningstar research suggests tax-efficient withdrawal strategies can add 1 to 2 percent per year in spending power over a 30-year retirement. That adds up.
Building This Diversification
- Contribute to Roth 401k or Roth IRAs while you can.
- Consider steady Roth conversions before RMD age.
- Maintain a taxable brokerage account for flexibility.
This kind of mix boosts early retirement feasibility and helps avoid hidden tax surprises.
Sign 4: You’re More Worried About Running Out of Time Than Running Out of Money
The Psychological Shift in Your 50s and 60s
In your early 50s, the questions are about money. Do I have enough? What if the market crashes? What if I live to 100? In your late 50s and early 60s, the questions change. How much time do I have to travel while I’m healthy? When will I see the grandkids more? What am I giving up by working five more years?
This is a key indicator, you’ve moved from accumulation to distribution. Your portfolio becomes a tool to fund your life, not a scorecard.
Common Regrets and Patterns
Studies of retirement satisfaction point to a common regret: wishing they retired sooner to enjoy their health. Here’s a pattern I see. Someone is ready at 58 or 59, but fear leads to one more year, then another. Suddenly they’re 65 and the go-go years from 60 to 70 were spent at a desk instead of on trails or at parks.
If work is fulfilling, that’s recreational employment, and it’s wonderful. If you find yourself counting weekends, resenting Mondays, or planning retirement more than doing your job, your mind is telling you something.
Listen to Your Mind
How many healthy years are you willing to trade for one more year of work? If the answer concerns you, you may be ready.
Sign 5: You Can Cover the 60 to 65 Health Care Gap Without Touching Retirement Accounts
Why Health Care Feels Like a Barrier, But Isn’t
Many people say they can’t retire before 65 because of health care costs. Pre-Medicare coverage is expensive, but there are ways to lower costs. Your retirement income may be lower than your working income, which can unlock subsidies.
Strategies to Bridge the Gap
ACA marketplace plans often look pricey without subsidies. A couple retiring at 60 might see premiums near $2,000 per month. With smart income planning, like pulling from Roth accounts or using cash reserves, modified adjusted gross income can stay under subsidy thresholds. That can reduce premiums to roughly $800 to $1,000 per month based on 2025 marketplace calculators.
Health Savings Accounts help too. If you’ve built $50,000 to $80,000 in an HSA, those funds can be spent tax-free on qualified medical costs.
Cash reserves also work. Build a health care bridge fund in cash or conservative investments. Earmark it for age 60 to 65. This avoids taxable withdrawals that could increase premiums and reduce subsidies.
- Check subsidy thresholds and plan your income source mix.
- Max out your HSA if you’re still working.
- Build a dedicated health care bridge fund.
Making It Solvable
With planning, health care costs are often less daunting than people fear. If you can cover this gap without tapping taxable retirement withdrawals, that’s a strong sign you’re truly ready. For help building a health care plan, book a free Retirement Clarity Call.
Sign 6: You’ve Stress Tested Your Plan Through Multiple Market Scenarios
Beyond Average Returns: Sequence of Returns Risk
Most projections assume a straight average return, like 7 percent per year. Real markets don’t work that way. Returns vary, and the order of those returns matters a lot in early retirement. This is sequence of returns risk, and it is the biggest threat in the first decade.
Imagine two people with $1.5 million, both averaging 7 percent for 30 years. One retires in 2008 before a crash, the other in 2009 before a recovery. The first may run out at 85. The second could still have $2 million at 90. Same average, different outcomes.
How to Stress Test Properly
Don’t rely on one rosy projection. Use Monte Carlo simulations that test thousands of possible market paths. Morningstar’s research suggests a safe starting withdrawal rate near 3.7 percent for those retiring in their 60s, which reflects sequence risk.
Protect your plan with:
- Two to three years of expenses in cash or short-term bonds
- A bucket strategy across conservative, moderate, and growth investments
- A plan to trim discretionary spending during down years
- Flexibility to delay Social Security or pick up part-time work if needed
Confidence from Preparation
You want to be prepared for the worst, not just hoping for the best. When your plan holds up in bear markets, recessions, and bad timing, confidence replaces fear. That changes everything.
Sign 7: You Know Your Annual Spending Number and It’s Less Than 3 to 4 Percent of Your Portfolio
Finding Your Real Number
Guessing is risky. Track your actual spending and build your retirement budget from that baseline. If you have $2 million saved and need $80,000 per year, that’s a 4 percent withdrawal rate. That’s near the upper edge of what research says is sustainable for a 30-year retirement.
Factor in Social Security. If you and your spouse receive $40,000 per year starting at 62, your portfolio only needs to cover $40,000. That’s a 2 percent withdrawal rate, which is very safe.
Withdrawal Rate Insights
Withdrawal rates between 3 and 4 percent have shown a high chance of success over long retirements. Many people find their true rate is lower once they account for guaranteed income.
Know your number based on your real lifestyle. It’s one of the most important indicators of readiness.
If It’s Close
If your number lands near 3 to 4 percent, you may be ready. And if you’re close but not quite there, bridge strategies can tip you over the line.
Bridge Strategies: If You Have 4–5 Signs But Not All 7
Why Bridges Work for “Almost Ready”
You’re not stuck working to 65 or 67 just because that’s what others do. A short list of practical moves can buy you freedom and protect your portfolio.
Practical Bridge Options
- Part-time work: You don’t need to go from full-time to zero. Many people consult for 2 to 3 years after leaving their main career. If you need $80,000 and earn $20,000 part-time, you only withdraw $60,000. That gap matters a lot early on.
- One year of super saving: If you’re 59 and close, take one focused year. Max your 401k and HSA, cut extras, and bank as much as possible. One big savings year can accelerate your timeline more than you think.
- Optimize Social Security: Sometimes claiming at 62 or 63 supports an earlier retirement and preserves your portfolio during the first years. The right choice depends on taxes, health, and survivor needs, so run the numbers.
- Right-size spending: Some costs drop in retirement. Commuting, work clothes, lunches out, that daily coffee. A clean budget can show you’re closer than you thought.
- Create modest income streams: Rental income, a dividend tilt, or monetizing a hobby can cover small gaps. Every dollar of outside income is a dollar you don’t have to withdraw.
Final Encouragement
Self-made millionaires often work longer than needed because they’ve never seen a full plan that proves they’re ready. Build your income floor, cut tax drag, and retire with confidence. For a customized plan, schedule your free Retirement Clarity Call with MOKAN Wealth.
Conclusion
The right question isn’t “Do I have enough money,” it’s “Do I have the right signs in place.” Keep fixed costs low, cover the basics with guaranteed income, use tax diversification, and know your spending number. Stress test your plan and have a clear health care bridge. If you’re close, use simple bridge strategies to tip the balance. Retirement at 60 is possible, and for many, it’s closer than it feels. What would you do with three extra healthy years?
