How to Retire at 62 and Still Have Plenty of Money

Retiring at 62 is a real possibility. Retiring early gives you more time to enjoy life and do the things that you love to do. You could even take on part-time work if you feel like it and want to stay busy, but you now have the freedom and flexibility to choose what you want to do and you can focus on the things that are important to you.

What You Need To Consider If Retiring At 62

To retire at 62 you need to know what you want out of life and have a plan in place. Once you have your plans laid out, it is much easier to determine how much money you will need.

Retiring early generally means that you will need at least twice as much saved up in order to keep your cost of living the same. Retiring at 62, or 52, doesn’t mean you can’t maintain a similar lifestyle to retirees who retire at age 65 or older, it just takes a little extra work on your part in order to make sure that you are financially secure.

Here are some key things to consider when retiring at 62:

1. Retiring early means working less, so your income will be lower

Retirees often have fewer expenses because they are not supporting a family anymore and spending money on children’s activities and other discretionary purchases, but this is also something to keep in mind as you plan how much money you will need. Retirements living may be more affordable than what you previously experienced. You can use an online calculator to help you determine how much money you will need.

2. Retiring early might leave you bored

Retirees often struggle with boredom because they no longer go to work every day and they don’t have a structured schedule. Retirees might volunteer or work part-time to fill the void and give themselves something productive to do with their time. Retiring early is about having plenty of free time, but it’s also about knowing how to use that free time in a way that helps you maintain your health and happiness.

3. Check your investment strategies

Retiring at age 62 might require you to think about your long-term and short-term investment strategies in order to ensure that you can make the most of what you have saved up. For example, your portfolio might need to be managed more closely than someone retiring at 65. You may have to take on more risks with your investments, even though you might not feel comfortable doing so.

4. Reduce your cost of living expenses

Retiring at age 62 might mean that you are not able to live as lavishly as other people who are retired. You may have to cut out some of the things that are nice, but not essential to your everyday life. This could be anything from eating out less often to purchasing cheaper brands of groceries. Look for opportunities where you can reduce your spending wherever possible so that when it comes time for retirement, you aren’t going to be stretching your money too far.

5. Put your money to good use early

Retiring early will allow you more time to put your money to use in order to produce income if that is what you want to do with it. Retirees who retire after age 65 have an extra five or six years before they run out of their savings. Retirees who retire at 62 are generally expected to run out of their savings within 15 years, so starting to generate income from your money might be necessary so that you can get more use out of it.

6. Consider part-time work

Retiring at 62 means retiring earlier than most people. Retiring too early can leave you strapped for money and struggling financially, but there is a happy medium somewhere that will work perfectly for you. Part-time work can help ensure that you don’t run out of money while still allowing you to enjoy your retirement while it lasts. Not every person who retires at age 62 wants to keep working or is capable of doing so, but for those who do feel up for the challenge, having a part-time job could make all the difference in terms of how long you are able to maintain your lifestyle on an annual basis.

7. Explore your hobbies

Retirees don’t have a set work schedule, so they can operate on their own time frame. Retired people who are at the age of 62 might find that they have more time for hobbies and other interests while still being able to earn some extra income if they want it. Retiring at 62 allows you the ability to do things when you feel like it without having someone looking over your shoulder or telling you what you need to accomplish next.

When Retiring At 62 Is A Good Idea

Remember, you control your spending. That’s right. Spend less. Read “The Millionaire Next Door”, a bit dated but full of great tips. So, you spend less that you earn. That’s living ‘below your means’. What about the income side? That comes from savings. Yep, you have to save in RRSPs / TFSAs or company pensions then live off that whether you’re 52 or 62 or other. The third leg of the stool is debt. to keep spending low, you can’t have any debt. So pay that off before you retire. Think about it: if you are having trouble paying off debt while working, how can you pay that off when your income drops in retirement?

When Retiring At 62 Is A Bad Idea

Retiring at age 62 can be a bad idea if it means that you are going to struggle financially, especially when compared with a 65-year-old retiree. Retiring too early might impact your pension plan and the amount of money you are entitled to. Retirees who retire before the age of 65 may not receive full benefits from their pension plans, which could severely limit your income. If you’re unsure about the terms of your pension or retirement plan with your employer, contact a Certified Financial Planner at Pension Solutions Canada. We can help review your pension statement, explain it to you, and help you prepare for retirement.

How Retiring At 62 Might Impact Your Pension Plan

Retirees who retire at the age of 62 will generally receive fewer benefits from their pension plans than people who retire at 65 or older. Sometimes it makes more financial sense to work the extra three years to reach 65 and get a bigger payout without penalties. For example, an Ontario teacher connected with me. The Teachers’ plan has an 85 factor: years of service + age. If you retire prior to the 85 factor, you are heavily penalized. Consult with someone who is familiar with the financial implications of retiring before you take a leap and decide to stop working early.

How Much Money Do You Need To Retire Early?

For most people, this is a good time to take a look at their budget and see what areas they can cut back on. You may find that living simply in retirement will give you everything that you need and more without the stress of managing a large income. Some people plan to work part-time in order to meet certain financial goals, while others know that they want to travel extensively when they retire early. I often recommend part time work. Find a job that you like. Just make enough to provide income needed without touching your savings. Let that grow; you might live to age 90.


In conclusion, retiring early gives you more time to enjoy life and do the things that you love to do, but it’s important that you plan your financial future very carefully to ensure your investments are going to yield high enough returns.

Retire with peace of mind by consulting with a Certified Financial Planner today. Think about what you want that period of your life to look like and take steps towards making it a reality now.

We specialize in assisting people in preparing for retirement. Allow us to evaluate and review your retirement income sources and assist you with retirement planning. Call us at 1-888-554-6661, or click here to book a virtual Zoom meeting.

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