July 5, 2026
Retiring 5 years early sounds like a dream — but what does it actually cost? This scenario compares retiring at 60 versus 65 for a median earner, revealing the real financial impact of fewer contribution years and more withdrawal years combined.
Early retirement is one of the most common financial dreams people have. And who could blame anyone for wanting to leave the workforce a few years sooner? But retiring at 60 instead of 65 isn't just five fewer years of working — it's five fewer years of saving, five fewer years of investment growth, and five more years of drawing down your portfolio. When you add all of that up, the difference might surprise you.
To make this concrete, we ran two side-by-side scenarios through the Career Retirement Calculator using a median earner profile. Both scenarios start at age 30 with an $85,000 salary, a 12% personal contribution rate, and a 4% employer match. The only difference is when retirement begins — age 60 or age 65. Everything else stays the same: a 7.0% annual return rate, a 4.0% withdrawal rate, and a life expectancy of 85.
In the standard plan, our earner works from age 30 to 65 — a full 35-year career. Over that time, they contribute a combined total of $822,000 between their own contributions and their employer's $206,000 match. Thanks to compounding growth over those decades, the portfolio reaches $2.77 million at retirement (or $1.17 million in today's inflation-adjusted dollars). From there, the 4% withdrawal rate generates a monthly retirement income of $9,223. And because the portfolio continues to grow even in withdrawal, it reaches $5.22 million by age 85 — never running out of money.
Notice that last milestone: the portfolio crosses $2 million at age 61 — one year after the early retiree would stop contributing. That's where the two paths diverge dramatically.
Career Stages
Median Earner — Retire at 65 (Baseline Plan)
In the early retirement scenario, the same earner stops working at age 60. The portfolio at that point sits at $1.82 million (or $870,000 in today's dollars). That's already a meaningful difference from the $2.77 million in the baseline — nearly $950,000 less at retirement. The monthly withdrawal drops to $6,082, compared to $9,223 in the standard plan. That's a difference of $3,141 every single month in retirement income.
The portfolio still doesn't run out by age 85 — it ends at $4.11 million — but the gap between the two outcomes is significant. The early retiree ends up with more than $1.11 million less at end of life, and gives up over $3,000 per month in spending power throughout their entire retirement.
Retiring 5 years early costs nearly $950,000 at retirement and reduces monthly income by $3,141 — not because of one single decision, but because of the compounding effect of fewer contributions, less growth, and more withdrawal years all happening at once.
Most people think about early retirement in terms of a simple trade-off: fewer paychecks, a smaller nest egg. But the math is actually a three-part hit working against you simultaneously.
None of these factors alone would create a nearly $1 million gap. But together, they compound against each other in a way that's easy to underestimate when you're doing the math in your head. The calculator makes it easy to see exactly how these forces interact.
In this scenario, the answer is no — the early retiree's portfolio doesn't deplete before age 85. The $1.82 million balance, combined with a 4% withdrawal rate and continued investment growth, is enough to sustain 25 years of retirement. But the lifestyle difference is real and lasting. A $6,082 monthly income versus $9,223 is a gap that affects housing decisions, travel, healthcare planning, and financial flexibility across an entire retirement.
It's also worth noting that this scenario assumes a relatively high contribution rate of 12%. Someone saving less aggressively might find that a 5-year early retirement does create a depletion risk, depending on their specific numbers.
Import the early retirement comparison below to see the full year-by-year projections for the Retire at 60 scenario. Toggle between the two plans in the calculator to visualize exactly where the portfolios diverge and how the withdrawal gap plays out over time. Make sure after pasting the career stages that you update the Global Assumptions in the Dashboard to match the assumptions outlined in this article.
Career Stages
Comparison: Retire at 60 (Same Earner, Early Exit)
This scenario uses a specific set of assumptions — $85,000 salary, 12% contribution, 4% match, 7% return, 4% withdrawal — that may not match your situation. Your salary might be higher or lower, your employer match may differ, and your personal risk tolerance could lead you to assume a different return rate. The goal here isn't to tell you when to retire. It's to show you that the decision has layers most people don't fully account for.
If early retirement is your goal, the calculator can help you work backward: how much more do you need to save now to make age 60 financially equivalent to age 65? What withdrawal rate would let you maintain a similar monthly income? These are powerful questions to explore before making any major career or savings decisions. As always, consider working with a qualified financial professional to evaluate your personal circumstances.
Five years doesn't feel like much when you're 30. But at the finish line, it's the difference between $6,082 and $9,223 every month for the rest of your life.