Can I Retire at 62 With $500k in a Roth IRA and $2,000 Monthly Income? Mark Henricks Wed, July 29, 2026 at 2:00 AM PDT 7 min read SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. Figuring out when you can afford to retire often comes down to determining whether your assets will produce enough annual income to support your lifestyle and spending needs. With $500,000 in a Roth IRA and $2,000 in combined monthly Social Security and pension payments, you may be able to afford to retire at age 62. However, that will mean living on approximately $44,000 per year. Some retirees may be satisfied with this level of income, but it may not support you adequately if you plan to do a lot of traveling or live in a high-cost area. Before making the decision to stop working at 62, you'll also need to develop a plan for paying for health insurance since you won't be eligible for Medicare until age 65. If you need help deciding when to retire, connect with a financial advisor and have them build you an income plan based on your unique financial situation. Calculating Retirement Income Deciding whether you can retire by a certain age involves comparing your estimated sources of retirement income with your estimated expenses in retirement. Here's a table showing what your hypothetical income sources would look like in your first year of retirement: Income Source Principal Withdrawal Rate Income Roth IRA $500,000 4% $20,000 Social Security and Pension NA NA $24,000 Total Income $44,000 Four percent is widely regarded as a safe withdrawal rate . That means, according to long-term models using a conservatively invested portfolio, you can likely withdraw 4% of your Roth IRA balance in the first year of your retirement. You could then adjust your subsequent withdrawals to account for inflation, and not run out of money for at least 30 years. If you withdraw $20,000 the first year and inflation is running at 3% annually, you would withdraw $20,600 in the second year, $21,218 the following year and so on. The 4% rule is a guideline rather than a hard-and-fast rule. It's a static withdrawal rate so it doesn't account for rising or falling spending needs. If you need your money to last longer than 30 years, you could withdraw less in the early years and potentially extend the longevity of your portfolio. And if need to withdraw more than 4%, you could choose to invest more aggressively to boost your investment return, providing a cushion in case markets slump or face an unexpected need. Keep in mind that Social Security benefits also are indexed to inflation , but pension benefits may not be. Depending on the future rate of inflation, this means your pension payments could lose purchasing power over time. Consider working with a financial advisor if you need help planning for the rising cost of living and accounting for inflation in your income...
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