How to Retire at 62 with Little Savings

22 Jul, 2025

Retiring at 62 with little savings might feel impossible—but with the right plan, patience, and creativity, it's achievable.

This guide offers smart, hopeful steps rooted in simplicity, clarity, and real-world strategies—without requiring a million-dollar nest egg.

Why Retiring at 62 With Little Savings Is More Common Than You Think

It’s easy to feel alone or inadequate when you imagine retirement and see headlines touting seven-figure nest eggs.

Yet millions nearing retirement have less than $100,000 saved, sometimes much less. If this is you, you’re not alone—and you have options.

No matter why your savings fell short—job loss, medical bills, family responsibilities, or economic shifts—you have choices. Retiring at 62 is possible with limited means, and you can do so with dignity, security, and joy.

Take the story of Clara, a 62-year-old who spent most of her life raising children and supporting family through tough times.

With limited savings but a generous Social Security benefit and a tight budget, she designed a comfortable life focused on meaning and community.

Stories like hers aren’t rare, and they’re proof that retirement is about more than money.

The Mindset Shift: Redefining Retirement Success

A secure retirement is about freedom, time, health, relationships, and meaning, not just numbers. Shifting how you view retirement is the first and most vital step.

• Focus on what matters most to you: time, passions, people.
• Embrace new experiences and growth—even small ones.
• Practice gratitude over comparison—compare less, appreciate more.
• See frugality as freedom, not deprivation; every dollar saved buys more peace and independence.

This mindset helped Miguel, who felt anxious facing his shrinking savings. By refocusing on what he values—like spending time with grandchildren, volunteering locally, and gardening—he found joy and stability beyond his bank account.

Step 1: Take a Fearless Financial Assessment

Get absolute clarity. Gather everything: account statements, debts, expected Social Security or pension, and monthly expenses.

• What is the minimum monthly cost to cover essentials?
• Which debts must you pay off or manage now?
• What luxuries, subscriptions, or non-essentials can you cut?

Create a simple spreadsheet listing all income sources and expenses. Don’t forget infrequent costs like car repairs or annual insurance premiums.

For example, walking through this process might reveal that eliminating a $50 streaming service and cooking more from scratch could save enough for an extra utility bill monthly.

Facing your finances honestly puts you in control—not overwhelmed.

Step 2: Shrink Your Cost of Living—Creatively

Lowering expenses is key, since you’ll rely more on fixed or limited income.

• Downsize or share your home. Renting out a room or moving into a smaller space can dramatically cut costs.
• Relocate to a lower cost-of-living area. Many retirees discover that moving from expensive metro areas to smaller towns or states with lower taxes and housing costs stretches their dollars far.
• Use public transportation or walk whenever possible to avoid car payments, insurance, and fuel.
• Reduce food waste by cooking at home and planning meals. Consider community gardens or food co-ops to access fresh produce inexpensively.
• Apply for government assistance like SNAP (food stamps), Medicaid, or utility assistance programs. There's no shame in getting help—these programs exist to support you.

As an example, Janet moved from a big city to a small town in the Midwest and cut her housing costs in half, allowing her to retire comfortably with Social Security and modest savings.

Step 3: Craft Your Retirement Income Patchwork

Reliance on multiple income streams increases stability and peace of mind:

• Social Security benefits: Know your expected amount at 62, 67, and 70 using the Social Security Administration’s calculators.
• Personal savings: Plan safe withdrawal rates—generally 3-4% annually to preserve principal over time.
• Pensions: Understand your payout options; some allow lump sums, others monthly payments.
• Part-time work or side gigs: Even a few hundred dollars a month supplements your budget and keeps you active.
• Rental income from spare rooms or properties.
• Other benefits based on eligibility, like Supplemental Security Income (SSI) or veterans’ benefits. Visit benefitscheckup.org to identify all you qualify for.

Daniel, who loved woodworking, started selling small handmade items online. His modest side income covered extra health costs and made his retirement budget more flexible.

Step 4: Maximize Social Security and Other Benefits

Social Security often forms the cornerstone of income for those with little savings. How you claim matters:

• Claiming at 62 gives earlier access, but permanently reduces your monthly benefit by up to 30%.
• Waiting to claim until your full retirement age (typically 66 or 67) or even 70 increases your benefit significantly.
• Calculate your break-even age—when the total benefits received from waiting outpace taking early payments. This depends on your health and financial needs.
• Explore other benefits, including Supplemental Security Income (SSI), Medicare Savings Programs, and food assistance.

If you’re unsure, consult a Social Security advisor or use official calculators like the SSA’s Retirement Estimator.

Sofia delayed claiming Social Security from 62 to 66, which boosted her monthly benefit by nearly 30%, stabilizing her fixed income for years to come.

Step 5: Rethink Housing (Your Biggest Expense)

Housing absorbs 30–50% of retirement budgets, so creative approaches can make a difference:

• House hacking: Rent a room or convert a basement; the extra rent offsets your mortgage or rent.
• Tiny homes or RV living: For the adventurous, these provide flexibility and low costs.
• 55+ communities: Often include bundled utilities, maintenance, and social activities affordably.
• Multigenerational living: Moving in with, or hosting, family can lower expenses and increase support.
• Assisted living options: Many have sliding-scale fees or subsidies if you qualify.

Consider Ben and Rose, who moved from a large house to a cozy, 55+ community home. Lower costs and a friendly social environment improved their finances and wellbeing.

Step 6: Secure Affordable Healthcare

Healthcare costs can be one of the largest and most unpredictable expenses—planning matters.

• Marketplace insurance: Check healthcare.gov for subsidized plans if you’re under Medicare age.
• Medicaid: Qualify in many states with low income/assets.
• Community clinics: Federally Qualified Health Centers offer affordable primary care.
• Drug discount programs: Many pharmacies offer discounts or assistance programs for medications.
• Negotiate medical bills and request payment plans where possible.

Maria, who retired at 62 with pre-existing conditions, combined Medicaid and marketplace supplements, avoiding unaffordable medical debt.

Step 7: Embrace Flexible, Rewarding Part-Time Work

Working during retirement isn’t defeat—it’s empowerment:

• Seasonal jobs: tax prep, retail holiday help, parks.
• Remote gigs: tutoring, virtual assistant, customer service.
• Caretaking or pet-sitting.
• Handyman, crafts, or selling items at markets.

It keeps you socially engaged, mentally active, and financially secure.

Rick, a retired school bus driver, now tutors children part-time online and enjoys the extra income and connections.

Step 8: Strengthen Your Social Safety Net

You don’t have to go it alone:

• Join community clubs, libraries, or senior centers.
• Volunteer locally or online.
• Barter services or share rides within your network.
• Start social traditions: potlucks, games, walking groups.

Social isolation is a real risk—staying connected maintains emotional and practical wellbeing.

Step 9: Embrace Deliberate Frugality

Frugality means intention and purpose, not sacrifice.

• Cook at home more often, minimizing eating out.
• Buy second-hand clothing, furniture, and household items.
• Cut cable subscriptions; use libraries and streaming.
• Take advantage of senior discounts at stores, transportation, restaurants.
• Choose low-cost hobbies like hiking, gardening, or community classes.

For practical, actionable strategies that go beyond the usual advice, we recommend How Much Money Do I Need to Retire?: Uncommon Financial Planning Wisdom for a Stress-Free Retirement (Financial Freedom for Smart People). This book is packed with insightful guidance to help you plan your retirement with greater confidence and clarity—no matter your starting point.

Step 10: Design a Purposeful, Joyful Retirement Life

Retirement happiness comes from what you do with your time:

• Reconnect with passions—art, music, learning.
• Volunteer and share wisdom.
• Set manageable personal goals and celebrate milestones.
• Build joyful routines: daily walks, calls with loved ones, creative projects.

Anna rediscovered painting in retirement and joined a local art group, enriching her days and friendships.

Your New Beginning at 62

Retiring at 62 with little savings is challenging but possible with intention, creativity, and an open heart. Your value is not your net worth. Align your resources and mindset to thrive, building peace and purpose.

Start small. Begin today. You've got this.

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