Getting Ready to Retire at 60: What Needs to Work Together

Retiring at 60 can be a powerful financial and lifestyle decision. It gives you time freedom while you're still healthy and active, but it also brings a unique set of planning challenges. You're too young for Medicare, a few years early for Social Security, and potentially sitting on large tax-deferred balances that will eventually trigger Required Minimum Distributions (RMDs). This isn't just about whether you can retire at 60. It's about how to retire well. Here's what needs to work together:

1. Build a Sustainable, Tax-Aware Cash Flow Plan

Age 60 is often a "gap decade" for income planning. You’re no longer earning a salary, but you're not yet receiving Social Security or RMDs. This means your cash flow will likely come from your investment accounts, and the order in which you withdraw matters.

A tax-aware withdrawal strategy (pulling from taxable, then pre-tax, then Roth accounts) can help you minimize taxes while maintaining flexibility. But this isn’t one-size-fits-all. The right sequence depends on your total assets, tax bracket, and future income expectations.

2. Roth Conversions: Timing Is Everything

The early retirement window (age 60–72) is often the best time to do Roth conversions. With earned income gone or reduced, you may have several low-tax years where you can convert traditional IRA or 401(k) assets into Roth IRAs at a favorable rate.

This reduces future RMDs, gives you more flexibility later in retirement, and helps manage future IRMAA surcharges on Medicare. But it has to be done with precision. Converting too much could spike your marginal tax rate or jeopardize ACA subsidies.

3. Withdrawal Sequencing: Beyond Just Taxes

Taxes matter, but so does liquidity. Some accounts are more volatile, some more tax-efficient, and some are just easier to access. A strong withdrawal plan takes into account not just what to draw from, but when and why.

For example, you may use taxable accounts for early income, convert IRAs to Roths in the background, and leave Roth assets untouched for future decades. Your portfolio should support this strategy, not work against it.

4. Social Security Timing: You Don’t Have to Decide at 60—But You Should Run the Math

Claiming Social Security early reduces your lifetime benefit, but waiting requires a bridge strategy. Knowing when to claim is one of the biggest levers in your retirement plan. It affects taxes, cash flow, and your surviving spouse's benefit.

Even if you don’t plan to file until 67 or 70, having a modeled plan today helps you align other income sources appropriately.

5. Bridging the Medicare Gap: Don't Let Healthcare Derail the Plan

One of the most overlooked issues in early retirement is health coverage before Medicare begins at 65. You’ll need to budget for private insurance, COBRA, or ACA marketplace plans.

This is where Roth conversions and withdrawal planning intersect directly with healthcare costs. ACA premium subsidies are tied to your Modified Adjusted Gross Income (MAGI), so pulling too much from pre-tax accounts can eliminate subsidies and dramatically increase premiums.

Managing income tightly during this window can save tens of thousands of dollars.

6. Consolidate and Coordinate: Complexity Is the Enemy of Clarity

Many households have accounts scattered across multiple firms, advisors, or old employers. It may have worked fine while accumulating, but in retirement, coordination becomes critical.

Bringing accounts into a unified plan allows for better tax strategy, more efficient withdrawals, and clearer risk management. It also makes it easier to evaluate fees, automate distributions, and simplify estate planning.

Final Thought

Retiring at 60 isn’t just about reaching a number. It’s about having a coordinated, flexible plan that covers taxes, income, healthcare, and long-term needs. When those pieces work together, early retirement can be a confident and rewarding next chapter, not a leap of faith. About the Author:

Carson McLean, CFP® is the founder of Altruist Wealth Management, a flat-fee, fiduciary financial planning firm serving clients virtually across the country. With over 15 years of industry experience, including time at Dimensional Fund Advisors, Carson helps thoughtful professionals and retirees create tax-aware, sustainable retirement plans. He believes the best advice is transparent, objective, and built around real planning, not hidden fees or sales tactics. Disclosure:

This content is for informational and educational purposes only. It is not intended as personalized financial advice. Altruist Wealth Management is a registered investment adviser offering advisory services in jurisdictions where it is properly registered or exempt from registration. Past performance does not guarantee future results. Always consult a qualified professional regarding your specific situation.