Be Careful: Retiring at 62 With $2 Million Means Burning Through $380,000 Before Social Security Even Starts

"This couple faces a classic retirement dilemma-balancing longevity risk against lifestyle flexibility. Their $2 million portfolio ($1.4 million tax-deferred, $600,000 taxable) must bridge a critical gap: ages 62 to 67 (when Social Security starts) and 62 to 65 (when the pension begins and Medicare kicks in). During this three-year window, they need $95,000 annually with zero guaranteed income and must self-fund health insurance-likely $1,500 to $2,000 per month for a couple in their early 60s."

"At $95,000 annual spending, they would withdraw roughly $380,000 over five years before Social Security begins, then drop to $13,000 annually once guaranteed income covers $82,000. A conservative 60/40 portfolio (60% stocks, 40% bonds) historically returns 7% to 8% nominally. Using a Monte Carlo simulation with these parameters and a 30-year horizon, success probability sits near 85% to 90%-acceptable but not bulletproof."

A married couple ages 62 and 60 holds $2 million in savings ($1.4M tax-deferred, $600K taxable), a paid-off $650,000 home, and guaranteed future income totaling $82,000 annually starting at ages 65 and 67. They currently spend $68,000 annually but prefer $95,000 for travel and healthcare, creating a funding gap while they self-fund health insurance likely costing $1,500–$2,000 per month. With a 60/40 portfolio and a 30-year Monte Carlo, success probability is about 85–90% at $95,000, above 95% at $80,000, and near certain at $68,000. Delaying Social Security to age 70 raises benefits roughly 24% but increases early withdrawals.

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