Let's say you're 62 with $1.3 million saved. Congratulations, you've reached the part of retirement planning nobody warned you about.

Here's the thing: once you've accumulated enough, retirement stops being a straightforward yes-or-no calculation. Instead, it morphs into something trickier—a versioning problem. Retiring now solves one issue immediately. You reclaim your time. But it simultaneously creates another challenge: figuring out exactly what kind of retirement you're purchasing with that decision.

Why the timing carries hidden costs

Retiring at 62 is absolutely doable. Lots of people pull it off successfully. But the timing reshapes your financial plan in some meaningful ways that compound over time.

Start with Social Security. At 62, you're eligible to claim benefits, but taking them early permanently shrinks your monthly payment compared to waiting until full retirement age. Delay past that, and your benefit grows each year until you hit 70. What was once a background benefit suddenly becomes a strategic lever. The claiming decision directly determines how much strain your investment portfolio needs to handle during those early retirement years.

Then there's the portfolio itself, which essentially becomes your new paycheck. Even if your long-term plan involves relying more heavily on Social Security down the road, retiring at 62 typically means tapping your investments earlier and for a longer stretch. That exposes you to sequence risk—the danger that a market downturn early in retirement can permanently damage your plan. It's not dramatic in the moment, but it compounds in ways that matter.

And taxes? They don't retire just because you did. Withdrawals from traditional retirement accounts get taxed as ordinary income. Eventually, required minimum distributions kick in and force you to take money out whether you need it or not. The choices you make in your early 60s ripple forward, influencing how much tax flexibility you'll have in your 70s and beyond.

None of this makes retiring at 62 wrong. It just means the decision isn't cost-free.

Two paths, different tradeoffs

Think of it as Fork A versus Fork B.

Fork A means retiring right now. You get your time back immediately, but in exchange, you create a planning puzzle. You'll need to navigate the bridge years between leaving work and becoming Medicare-eligible at 65. You'll have to coordinate when to claim Social Security. And you'll need to design a withdrawal strategy that holds up even when markets get choppy.

Fork B means working a little longer. Staying employed until 65 or so isn't really about the money at that point—it's about buying optionality. A few extra earning years translate to continued retirement contributions, fewer early withdrawals, and more wiggle room around Social Security timing. For many people, there's also a psychological benefit. Retiring at 65 lines up perfectly with Medicare eligibility, which eliminates one major unknown and simplifies health insurance planning considerably.

Start with spending, not strategies

Before diving into sophisticated Social Security claiming tactics or debating safe withdrawal rates, it helps to zoom out and examine something more fundamental: how you actually spend money.

What expenses are fixed and unavoidable—think housing, insurance, utilities, basic living costs—and what's discretionary? This exercise often reveals that the real question isn't whether you can afford to retire. It's whether the retirement lifestyle you're imagining actually matches your current spending patterns.

Getting everything visible in one place makes this reality check more honest. A consolidated view of retirement accounts, taxable savings, and monthly cash flow clarifies how much income is already committed and how much flexibility genuinely exists. For people still contributing or consolidating accounts, seeing IRAs, rollovers, and ongoing cash flow side by side can sharpen the picture considerably.

Don't guess—model it

Once you understand your spending reality, resist the temptation to eyeball the rest.

This isn't a binary decision. You're choosing between two distinct retirement versions with different tradeoffs around timing, taxes, and risk exposure. The interplay between Social Security claiming, portfolio withdrawals, and market performance over a multi-decade retirement is genuinely difficult to predict intuitively.

That's exactly where modeling becomes valuable. A fiduciary financial advisor can run scenarios showing how retiring now versus working a few more years affects lifetime income, tax liability, and plan sustainability under various market conditions. Testing both paths before committing lets you see what each choice actually costs over time, rather than relying on rules of thumb that might not fit your situation.

Managing early withdrawal anxiety

Even after the numbers pencil out, early drawdown pressure can linger psychologically.

For retirees nervous about leaning too heavily on portfolio withdrawals during the first few years, adding a separate income stream can make the overall plan feel more durable. Income that isn't directly tied to daily market swings can reduce both financial stress and psychological unease early in retirement. Some retirees consider options like fractional real estate investing as a diversification tool, which can provide income that moves independently of stock market volatility.

You're choosing between versions of success

At 62 with $1.3 million saved, you're not wrestling with failure. You're choosing between different flavors of success.

Retire now, and your new job becomes managing those early years thoughtfully—coordinating Social Security, optimizing withdrawals, and staying resilient through market volatility. Work longer, and you purchase flexibility and breathing room. Either approach can work beautifully.

The mistake isn't choosing one path over the other. The mistake is assuming they're equivalent, or picking based on what sounds good rather than what the numbers actually show. The smart move is to model the outcomes, understand the real tradeoffs, and deliberately choose the version of retirement you actually want—not just the one that sounds right on paper.