When Can I Retire? How to Calculate Your Personal Retirement Age

There is no law that says you have to retire at 65. Or 67. Or ever. The idea that retirement happens at a specific birthday is a myth, and it costs people years of unnecessary work or (worse) years of running out of money because they retired too soon based on a number they saw on the internet.

Your retirement age is not a fixed number. It's a calculation. And you can learn to do it yourself in about 15 minutes.

The short version: Your personal retirement age is the point where your savings, investment returns, and guaranteed income (like Social Security) can cover your annual spending for the rest of your life. You find it by calculating your "gap" (spending minus guaranteed income), multiplying by 25 to 33, and comparing that to your current trajectory. Healthcare before Medicare at 65 is the wild card most people forget.

The Retirement Equation

Forget the rules of thumb. "Save 10x your salary" is a bumper sticker, not a plan. Here's the actual equation:

Annual spending in retirement minus guaranteed annual income equals the gap your portfolio must fill.

The gap × 25 (or higher) equals your portfolio target.

That's it. Everything else is detail.

Step 1: Know Your Spending

Most people guess wrong. They assume retirement spending drops to 70% or 80% of their working income. Sometimes it does. Sometimes it doesn't.

The first few years of retirement tend to be expensive: travel, home projects, hobbies you finally have time for. The middle years often see lower spending as the novelty fades. Then spending can spike again in the late years due to healthcare and long-term care costs. Financial researcher David Blanchett calls this pattern the "Retirement Spending Smile" [1].

The best starting point? Track your actual spending for three months. Not what you think you spend. What you actually spend. Include everything: mortgage, groceries, that $6.89 oat milk latte you pretend is a treat but buy every single day.

Step 2: Estimate Your Guaranteed Income

For most Americans, this means Social Security. The average monthly benefit in January 2026 is $2,071 [2]. But your benefit depends on your earnings history and when you claim.

Claiming at 62 costs you 30% permanently. Delaying to 70 gives you 24% more than FRA. Create a my Social Security account at SSA.gov to see your personal estimate. For a deeper look at how these numbers work, see our guide on Full Retirement Age by birth year.

If you have a pension, rental income, or an annuity, add those to the guaranteed side of the equation.

Step 3: Calculate the Gap

Here's a worked example. Meet Priya, age 55, earning $72,000 per year.

• Annual spending: $52,000 (she tracked it)
• Social Security at age 67: $24,000/year (estimated from SSA.gov)
• The gap: $52,000 − $24,000 = $28,000/year

Step 4: Set the Portfolio Target

Priya multiplies her gap by 25 (based on the 4% rule for a 30-year retirement):

$28,000 × 25 = $700,000

If she wants extra margin for a longer retirement or market downturns, she uses a multiplier of 30 or 33:

Morningstar's 2025 research recommends 3.9% for a 30-year retirement with 90% success probability [3]. If Priya plans to retire before 67, her money needs to last longer, and she should use a lower rate.

Step 5: Compare to Reality

Priya has $185,000 saved (close to the median for her age group [4]). She needs $700,000 to $924,000. That's a gap of $515,000 to $739,000.

At 6% real returns and $1,650 per month in new savings, she reaches $700,000 by age 67. Reaching the more conservative $924,000 target would push her closer to age 70 or require bumping contributions higher.

(Real life is messier than this. Market returns aren't constant. Spending changes. Medical bills appear out of nowhere. But this framework gives you a map, not a GPS waypoint.)

The Healthcare Variable

Here's the factor that blows up the cleanest retirement math: health insurance.

Medicare starts at 65. Not 62. Not "when you retire." Exactly 65. If Priya retires at 62, she needs three years of her own health insurance.

The average cost of a Silver ACA plan for a 60-year-old in 2026 is roughly $1,313 per month before subsidies [5]. That's $15,756 per year, or about $47,268 for three gap years.

And here's the wrinkle: if Priya keeps her taxable income low (by drawing from Roth accounts or taxable brokerage accounts), she may qualify for ACA premium subsidies that slash that cost dramatically. The subsidies are based on income, not assets. A portfolio worth $900,000 paired with $30,000 of taxable income can still qualify.

After 65, healthcare doesn't get free. Fidelity estimates a 65-year-old couple needs $345,000 for medical expenses in retirement [6]. Medicare Part B premiums alone cost $202.90 per month in 2026 [7]. Add supplemental coverage (Medigap), Part D (prescriptions), and out-of-pocket costs, and healthcare remains the biggest variable in any retirement plan.

I know someone who retired at 61 and budgeted $800 a month for healthcare. Her first year's actual cost, after a minor surgery and two specialist visits, was over $14,000. She was fine financially because she'd built a cushion. But the gap between "budgeted" and "actual" was a jolt.

The "Can I Retire Yet?" Quick Test

If you don't want to build a spreadsheet, here's a rough diagnostic:

1. Your annual spending (real, tracked number): $________
2. Your guaranteed annual income (Social Security at planned claiming age + pensions): $________
3. The gap (line 1 minus line 2): $________
4. Your target portfolio (line 3 × 28): $________
5. Your current savings: $________
6. Are you there yet?

If line 5 ≥ line 4, you can probably retire now (assuming you've accounted for healthcare). If not, the distance between those two numbers tells you how many more years of saving and growth you need.

Use our early retirement calculator to model this with your actual numbers, including different return assumptions and Social Security timing.

When Retirement Happens to You

Gallup data shows a persistent pattern: people expect to retire at 66 but actually retire at 62 [8]. That four-year gap is filled with layoffs, health problems, eldercare responsibilities, and the simple reality that the job market isn't always kind to 60-year-olds.

Planning only for voluntary retirement is like only buying car insurance for the days you plan to have an accident. The involuntary version is more common and more financially dangerous, because it arrives without the savings you expected.

The best hedge? Run your retirement equation at both your target age and at five years earlier. If the early scenario is survivable (even if uncomfortable), you have genuine security. If it's catastrophic, that's a signal to accelerate savings now, while you still can.

For a broader framework on building that resilience, see our complete retirement planning guide.

Your Next Move

1. Track your actual spending for 90 days. Use Monarch Money, YNAB, or a simple spreadsheet. Don't estimate. Measure.

2. Create your SSA.gov account and note your projected benefit at ages 62, 67, and 70.

3. Run the gap calculation described above. Write the number down. Pin it somewhere you'll see it.

4. Price health insurance at HealthCare.gov for your age and zip code. Add the pre-Medicare gap cost to your portfolio target.

5. Set a savings rate that closes the gap. If you need $700,000 by age 67 and you have $185,000 at age 55, you need to save roughly $1,650/month at 6% real returns. If your employer matches 401(k) contributions, count that. The 2026 401(k) contribution limit is $24,500 ($32,500 with catch-up contributions for those 50 and older) [9].

For a broader look at investing those savings wisely, explore how index funds work and why they matter.

References

1. Blanchett, D. (2013/2023). The Retirement Spending Smile. Journal of Financial Planning / Morningstar.
2. Social Security Administration. (2025). Cost-of-Living Adjustment (COLA) Information for 2026. SSA.gov.
3. Arnott, A., Benz, C., & Kephart, J. (2025). The State of Retirement Income 2025. Morningstar.
4. Board of Governors of the Federal Reserve System. (2023). Survey of Consumer Finances (SCF) 2022. Federalreserve.gov.
5. ValuePenguin. (2026). Average Cost of Health Insurance (2026). ValuePenguin.com.
6. Fidelity Investments. (2025). Fidelity Releases 2025 Retiree Health Care Cost Estimate. Fidelity Newsroom.
7. Centers for Medicare & Medicaid Services. (2025). 2026 Medicare Parts A & B Premiums and Deductibles. CMS.gov.
8. Gallup. (2022). Retiring, or Planning to Retire, Later. Gallup News.
9. Internal Revenue Service. (2025). 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500. IRS.gov.