Can We Retire at 60 in 2 Years With $1.4M in IRAs and a Paid-Off $750k Home?

Core Insights - Early retirement presents significant financial challenges, including the delay in accessing Social Security and Medicare benefits, and a greater reliance on portfolio withdrawals during the initial years of retirement [5][18]. Financial Planning for Early Retirement - Individuals retiring at age 60 will face a two-year gap before they can collect Social Security, which may strain finances if living on a tight budget [3][5]. - The minimum age to begin taking Social Security benefits is 62, but this results in a 30% reduction in benefits for life; full benefits are available at age 67 [4][5]. - Delaying Social Security until age 70 can increase benefits by at least 24%, but requires reliance on other income sources until that age [4][12]. Income and Asset Management - A hypothetical couple with $1.4 million in IRAs and a $750,000 home could withdraw approximately $61,600 in the first year of retirement using the 4% rule, assuming a 5% annual growth rate [9][12]. - Selling a home valued at $750,000 could increase total assets to $2.29 million, allowing for a first-year withdrawal of about $91,600, but home equity is not a full-value financial asset due to ongoing housing costs [15][16]. Home Equity Considerations - Utilizing home equity can provide additional funds for retirement, but it may lead to increased housing costs if a new home is purchased or if renting is chosen [16][17]. - Reverse mortgages are an option for accessing home equity without selling, but they come with risks that need careful consideration [19]. Conclusion - Early retirement is achievable but requires thorough planning to ensure sufficient reliable income to cover expenses before Social Security and Medicare benefits kick in [18].