He Has $1.7M, Two Kids in College, and a Pension — Can David Retire at 62?

My man David has spent 28 years keeping county government networks running. He's 57, methodical by nature (occupational hazard, he'd tell you), and he's starting to notice that the Monday morning alarm hits different than it used to. His wife Lisa, 55, works as an office administrator at a medical practice. Their son Tyler is a junior at the state university. Their daughter Emma just started at community college and plans to transfer to a four-year school next fall.

David's retirement planning centers around $1.7 million spread across a three-bucket portfolio: a 457(b) he's maxed for years, a Roth IRA, and a taxable brokerage account. He'll collect a county pension at 62. Social Security waits until 67. And somewhere in the next decade, he and Lisa expect to inherit roughly $500,000 from his parents' estate.

The question keeping David up at night: Can he actually walk away from IT in five years, with two kids finishing college and five years of gap time before Social Security checks start arriving?

We ran his numbers through a detailed retirement simulation using ReadyAimRetire's retirement planning platform. Here's what the data says. (Quick note: that $500,000 expected inheritance? We left it out of these projections entirely. Think of it as a margin of safety that doesn't even show up in the numbers below.)

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Portfolio Analysis: Plan Assumptions at a Glance

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The Portfolio at Retirement: Five Years of Growth Before the Clock Starts

David isn't retiring tomorrow. He's got five more years of contributions and market growth ahead of him. By age 62, his $1.7 million portfolio is projected to grow to approximately $2.35 million, even as college tuition eats into his contribution rate.

That's the number he walks into retirement with. Not $1.7 million. The distinction matters because those five years of compounding and continued savings create a real cushion before he starts drawing down.

From there, the portfolio never declines in this projection. By age 89, it reaches $5.7 million. David doesn't run out of money. The portfolio grows throughout his entire retirement.

Three factors compound in his favor:

1. The pension bridges the early years. At $26,400 per year starting at 62, it covers a little over a quarter of his annual spending from day one.
2. Social Security fills the remaining gap at 67. Combined pension and Social Security total $58,800 per year, covering the majority of his spending needs.
3. A conservative withdrawal rate. Once both income streams are active, portfolio withdrawals drop well below what the portfolio earns, allowing it to grow even in retirement.

The Gap Years: Ages 62 to 67

This is the part that keeps David pacing around the kitchen at midnight. And honestly, I get it. Between 62 and 67, he's got pension income of $26,400 but spending of roughly $94,600 in that first retirement year ($6,800 a month in today's dollars after five years of 3% inflation).

That leaves roughly $72,000 to $80,000 a year (including taxes) that has to come from the portfolio. Over five years, that's about $380,000 in withdrawals, drawn from a $2.35 million portfolio.

In percentage terms? That's a withdrawal rate of just over 3% in the first year. Well within safe territory. The portfolio continues earning a blended return of roughly 5.6% at his 55/45 allocation, which actually exceeds what he's pulling out, even during these years before Social Security.

The gap years are manageable. They're not comfortable the way a paycheck is comfortable. But the math holds without strain.

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After 67: The Numbers Relax

Once Social Security begins at $32,400 per year, David's combined guaranteed income rises to $58,800 annually. His spending will be higher by then. At 3% annual inflation, it'll be closer to $109,700 by age 67. He'll still draw from the portfolio, but the draw drops considerably compared to the gap years.

The portfolio's growth rate outpaces withdrawals from age 67 onward. That's why the ending balance is so much higher than the starting balance. This isn't a plan that barely survives. It's a plan with real margin.

His total lifetime taxes are projected at $261,419, with an average effective rate of 2.8%. That's remarkably low, and it reflects a withdrawal strategy that leans heavily on tax-advantaged and Roth sources during years when taxable income would otherwise be minimal.

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What Could Go Wrong

Look, the projection uses fixed return assumptions (7% equity, 4% fixed income) without modeling sequence-of-returns risk. Real markets don't deliver steady 7% returns. They deliver 22% one year and negative 15% the next. And the order matters enormously for someone in the withdrawal phase.

The biggest vulnerabilities:

A bear market in years 62 to 67. If equities drop 30% in David's first or second year of retirement, his portfolio takes a hit precisely when he's withdrawing the most (before Social Security kicks in). A $2.35 million portfolio could temporarily become a $1.8 million portfolio, and pulling $72,000+ per year from a shrinking base compounds the problem. This is exactly the sequence of returns risk that can destroy decades of savings if it hits at the wrong time.

Healthcare costs between 62 and 65. David will need to bridge three years without employer-sponsored health insurance and before Medicare eligibility at 65. ACA marketplace premiums for a couple in their early 60s can run $1,800 to $3,000 per month or more depending on the state, plan level, and subsidy eligibility. Here's the thing though. With only $26,400 in pension income during these years, David and Lisa may qualify for significant premium tax credits that substantially reduce this cost. If healthcare isn't already baked into the $6,800 monthly spending figure, it could represent a meaningful gap or a manageable expense depending on subsidy availability at the time.

Inflation running hotter than 3%. The plan assumes 3% inflation throughout. We saw sustained inflation above 5% in 2022, and rates climbed back above 3% in early 2026. Healthcare and housing costs tend to outpace headline CPI. A prolonged period of elevated inflation erodes purchasing power faster than this model accounts for.

College costs extending. If Tyler takes a fifth year or Emma's transfer costs more than expected, David may enter retirement with a lower portfolio than the $2.35 million projected. Every parent reading this just nodded.

Longevity beyond 89. The plan runs to age 89. David could live to 95. Those extra six years of spending, at that point inflation-adjusted to over $200,000 per year, would require the portfolio to remain substantially intact at 89. Given the projected $5.7 million ending balance, this is unlikely to be a problem, but the plan doesn't model those years explicitly.

Lisa's retirement timeline. The plan models David's income sources, but Lisa's eventual Social Security benefit (whether her own or a spousal benefit) isn't reflected in the projections. This is actually another source of unmodeled upside.

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Strategic Retirement Planning Opportunities

David's plan is already in strong shape. But a few moves could make it more resilient or tax-efficient. These are worth thinking through.

Roth conversions in the gap years (ages 62 to 67). With only $26,400 in pension income and no Social Security yet, David's taxable income will be unusually low during these five years. This creates an opportunity to convert portions of his 457(b) to Roth at low tax brackets, reducing future required minimum distributions and creating more tax-free income in later years. His 2.8% average effective tax rate suggests the plan may already incorporate this strategy, but optimizing the conversion amounts year by year could save tens of thousands in lifetime taxes.

A cash or short-term bond reserve for sequence risk. Setting aside two to three years of portfolio withdrawals (roughly $100,000 to $150,000) in cash or short-term bonds before retirement would allow David to avoid selling equities during a downturn. This "bucket strategy" lets him ride out a bear market in years 62 to 64 without locking in losses.

Delaying Social Security past 67. The plan models claiming at 67, but if David's portfolio continues growing and his health is good, waiting until 70 would increase his Social Security benefit by 24% (8% per year of delayed credits). For someone whose portfolio can clearly support additional gap years, the guaranteed inflation-adjusted income boost is worth modeling.

Confirming healthcare bridge costs. If ACA premiums aren't explicitly included in the $6,800 monthly spending, David should price marketplace plans in his state and adjust the plan accordingly. At lower income levels (pension income of $26,400 for a household of two), he may qualify for substantial premium subsidies. Alternatively, he might consider a part-time bridge job that maintains health insurance during those crucial years before Medicare kicks in.

Every situation is unique, which is why running your own retirement projections on ReadyAimRetire can help you test these strategies with your specific numbers and timeline.

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The Bottom Line

David's question was whether $1.7 million, a county pension, and Social Security at 67 could sustain him and Lisa through 27 years of retirement starting at 62.

The answer is yes. With substantial margin.

The portfolio never drops below its starting value in this projection. Total lifetime taxes remain under $262,000. The gap years before Social Security represent a withdrawal rate of about 3%, comfortably below the 4% rule's starting rate. And none of this accounts for the expected $500,000 inheritance or Lisa's future Social Security benefit. Those are both unmodeled upside just sitting there.

The risks are real but manageable: sequence-of-returns in early retirement, healthcare bridging costs, and inflation running hot. None of them are existential to this plan given its margin of safety, but each one deserves a contingency.

Here's something I think is worth highlighting. The county pension (often undervalued by private-sector workers who don't have one) acts as a foundation that dramatically reduces portfolio pressure from day one. The 457(b) gives him penalty-free access before age 59½, unlike a 401(k). And his Roth holdings offer tax-free flexibility in years where taxable income needs careful management.

Can David walk away from IT at 62? The math says he can. The five years between now and then are for refining the details: optimizing Roth conversions, pricing healthcare, building a cash buffer, and watching Tyler and Emma cross the graduation stage.

I think that last part might end up being the best part of the whole plan.

Thanks for reading if you've made it this far. Peace!

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This analysis is based on a retirement simulation using the assumptions shown above. It is not personalized financial advice. Actual results will vary based on market performance, tax law changes, health costs, and personal circumstances. Consider consulting a fee-only financial planner before making major retirement decisions.