Dec 12, 2025
There are more than 24 million millionaires in the U.S. If you’re one of them, you might have the extraordinary privilege of being able to retire whenever you want.
Most Americans consider $1.26 million to be the “magic number” for retirement, according to Northwestern Mutual’s 2025 Planning & Progress Study. (1) So, if you have more than that amount, you could be ready to quit the rat race.
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Alternatively, you may prefer to continue working and saving. Many millionaires and multimillionaires continue their careers for as long as possible. Even billionaire Warren Buffett has continued to work well into his 90s.
But that’s not an ideal path for everyone. Here are three reasons why you should consider retiring by age 62 if you’ve achieved your financial milestones.
You’ve outgrown the 4% rule
The 4% rule developed by William Bengen has been the gold standard for most financial advisors since the 1990s.
Bengen’s analysis of historical stock and bond market returns suggested retirees could make their money last at least 30 years by withdrawing 4% of their savings in the first year of retirement and then adjusting that amount annually for inflation.
For most people in most situations, this rule is a helpful guideline for retirement planning.
With $1.5 million in your portfolio, a 4% withdrawal would deliver $60,000 in annual income. If you add Social Security benefits on top, you may have more than enough cash flow to live a comfortable life. And, if your investments do better than average historical returns, there’s a chance you could end up retiring with too much money.
Put simply, this milestone allows you to do what you really love, and if it isn’t work you should consider retiring as soon as possible. Your excess cash flow can then be directed to anything that gives you a sense of fulfillment, such as gifts to loved ones or charitable projects that align with your values.
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Room for tax maneuvers
Retiring at 62 with a $1.5 million nest egg means you can probably afford to delay your application for Social Security benefits. Doing so is a win-win for several reasons.
Delaying from full retirement age to 70 could boost your monthly payout by as much as 32%. It also offers tax benefits. (2)
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Waiting until 70 means temporarily recording a lower taxable income and potentially falling into a lower tax bracket.
Among other things, this could open a window to minimize the taxes you pay converting traditional IRA funds to Roth accounts or tax gain harvesting, and reduce the size of the required minimum distributions (RMDs) you must take from your tax-advantaged accounts at age 73.
For those in the seven-figure club, minimizing taxes could be more of a concern than running out of money. In most cases, retiring early allows you to optimize for such tax savings.
Longer healthy retirement
Life expectancy in the U.S. is 76.4 years, according to the World Health Organization (WHO). (3)However, that doesn’t account for the quality of life. Chronic and age-related health concerns can significantly diminish the enjoyment of your golden years.
Unfortunately, the healthy life expectancy (HLE) in America is significantly lower than the average life expectancy. According to the WHO, HLE is 65.1 for women and just 62.8 for men. In other words, if you retire at 62, you might not have long to enjoy all your financial freedom in full health.
This is, perhaps, the best reason to consider retiring as early as possible once you reach your financial goals. The utility of each dollar is higher when you’re 60 years old and still have the energy to go on vacations, instead of waiting until your 80s or 90s when you can barely leave your home.
Retiring early may leave you with a smaller nest egg, but it gives you the opportunity to enjoy the one resource that can never be replenished: time.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Northwestern Mutual (1); Social Security Association (SSA) (2); World Health Organization (WHO) (3.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
