Can You Retire at 63? Key Factors to Consider

Start by comparing your savings, income sources, Social Security timing, health insurance options, taxes and lifestyle goals before deciding whether leaving full-time work at 63 fits your household.

Key takeaways

• Retiring at 63 is possible for some people, but it still requires a clear plan before Medicare eligibility and full retirement age.

• At 63, Social Security retirement benefits are generally available, but claiming before full retirement age results in a reduced monthly benefit.³

• You are generally 2 years away from Medicare eligibility, which makes health insurance a major planning question.⁴

• Because age 63 is past 59½, many retirement account withdrawals can avoid the additional 10% tax, depending on account type and rules.¹

• Retiring at 63 depends on more than your total net worth. Health insurance, taxes, Social Security timing, debt and family responsibilities all affect whether the plan works day to day.

• Financial and tax professionals can help you compare claiming age, income sources, withdrawal timing and tax considerations.

How to plan for retirement at 63

At 63, retirement planning is less about whether Social Security is available and more about whether claiming now fits your broader income plan. You are past age 59½ and past the earliest Social Security claiming age, but Medicare eligibility and full retirement age are still ahead.

That makes it important to decide whether you would claim Social Security at 63, keep working in some capacity, use savings first or wait for a later claiming age. Each path can affect monthly income, taxable income and how much you need from savings before Medicare begins.

Personal responsibilities can also shape the decision. Debt, adult children, aging parents, household expenses, career changes and part-time work can all affect whether leaving full-time work feels manageable.

What makes age 63 different from other retirement ages

Age 63 sits between the earliest Social Security claiming age and Medicare eligibility. That can make the decision feel closer, but it also creates a timing question: claim Social Security now, wait, or use other income sources first.

If you are comparing retirement dates, a retirement age calculator can help you see how retiring at different times can affect the number of years you need to bridge before key retirement milestones.

How much money do you need to retire at 63?

There is no single savings number for retiring at 63. The right number depends on your annual spending, health insurance costs, Social Security timing, taxes, debt, income sources and how much flexibility you want.

Mutual of Omaha’s 2025 Decumulation Study found that 56% of near-retired consumers worry about inflation or increased costs, 59% worry about health care costs and 44% worry about outliving retirement savings.* These concerns can be useful stress tests when evaluating retirement at 63.

When estimating how much you need for retirement, avoid relying only on broad benchmarks, such as saving a certain multiple of your annual income. Those guidelines can be a starting point, but they do not account for your full picture, including annual spending, cash flow, health insurance, taxes, family responsibilities or different income and withdrawal scenarios.

From there, build scenarios around different Social Security, health insurance and withdrawal timelines.

How the 63-to-65 bridge can work

A retirement bridge is the income, savings and benefits plan that supports you between the day you stop full-time work and the day later retirement milestones, like Medicare eligibility or full retirement age, become available. At 63, the bridge to Medicare is shorter, but health insurance and Social Security timing still require planning.

For 68% of near-retired consumers, retirement is expected to include three or more income sources.* For someone retiring at 63, planning those income sources before Medicare and full retirement age can be especially important.

Can you access retirement accounts if you retire at 63?

You may be able to access some retirement money at 63, but account type, taxes and plan rules still matter. Because age 63 is past 59½, many retirement account withdrawals can avoid the additional 10% tax, depending on account type and rules.¹ Pretax withdrawals can also be taxed as ordinary income.

The Rule of 55, which allows you to take penalty-free withdrawals from your employer’s workplace plan like a 401(k) if you leave your employer during or after the year you turn 55, is usually less central at 63. Employer plan rules can still affect when and how distributions are available, and IRAs have their own rules.² Review access and taxes before deciding which accounts to use first.

Before withdrawing from retirement accounts, review:

• Which accounts are taxable, tax-deferred or tax-free

• Whether the money is in a workplace plan, IRA, Roth IRA or taxable account

• Whether ordinary income taxes could apply

• Whether your plan allows the type of distribution you want

• How withdrawals could affect your long-term income plan

• Whether a tax professional should review the strategy first

Knowing the difference between an IRA and a 401(k) can help you ask the right questions before making a withdrawal decision.

What happens to Social Security if you retire at 63?

If you retire at 63, you can generally claim Social Security retirement benefits, but claiming before full retirement age results in a reduced monthly benefit.³ For people born in 1960 or later, full retirement age is 67.³

At 63, the question is usually whether to claim now, keep working, use savings first or wait for a later claiming age. Claiming now can provide income sooner, while waiting can change your monthly benefit amount and affect how much you need from other income sources.³

Mark Zagurski, director of strategy and communications at Mutual of Omaha Advisors, explains why the decision should be personal: “Ultimately, it’s your choice and you should make an informed decision about when to apply for benefits based on your situation.”

As you compare timelines, learn more about when to apply for Social Security and how Social Security benefits are calculated.

How health insurance affects retiring at 63

Health insurance is a major planning question if you retire at 63. Medicare eligibility generally begins at age 65 for most people, which creates a 2-year health insurance bridge.⁴

Your options will depend on your household, employment situation and eligibility. Before making a decision, compare the total cost of each option, including premiums, deductibles, provider networks, prescriptions and how long the coverage lasts.

Before you retire, compare total health care costs, not just premiums. Deductibles, copays, coinsurance, prescription drugs, dental care and vision care can all affect your budget.

What expenses should you plan for if you retire at 63?

Retiring at 63 can shift your expenses, but it might not reduce them as much as expected. A simple budget can help you see which costs stay the same, change or end.

Among near-retired consumers, 70% often worry about unexpected expenses eating into savings.* Building a plan for those what-ifs can help you decide whether retirement at 63 feels realistic.

If debt is part of your budget, it can help to weigh the benefits of paying it down against the flexibility of keeping cash accessible. For some households, the choice is not simply paying off debt or saving more. The decision often comes down to balancing monthly cash flow with keeping emergency savings within reach.

When retiring at 63 makes sense

Retiring at 63 can make sense for some people who have:

• A clear retirement budget

• Health insurance planned before Medicare eligibility

• Accessible savings and retirement accounts

• Manageable debt

• Several potential income sources

• A Social Security timing strategy

• A tax-aware withdrawal plan

• Flexibility to adjust spending

• A clear plan for time, purpose and routine

It can also make sense for someone shifting into consulting, self-employment, part-time work or caregiving. If you are considering a nontraditional path, it can help to understand how to retire early while still planning for income, health insurance and long-term flexibility.

When retiring at 63 can be more challenging

Retiring at 63 can be more challenging if:

• You have not compared Social Security claiming options

• You do not have a health insurance bridge to Medicare

• You still have high-interest debt

• You are supporting children, parents or other family members

• You are relying on one income source

• Your plan assumes consistent market growth

• You have not planned for unexpected expenses

Only 53% of near-retired consumers feel very or extremely confident that their planned retirement income would support their spending throughout retirement.* A clear plan can help you see whether retiring at 63 fits your goals, timeline and comfort with risk.

Questions to ask before retiring at 63

• How much do I spend each year now?

• What expenses would change if I stopped working?

• How would I pay for health insurance until Medicare eligibility?

• Would I claim Social Security at 63 or use other income first?

• How would claiming now affect my monthly benefit?

• Which accounts would I use before Medicare begins?

• Would working a few more years improve my flexibility?

• How much debt would I carry into retirement?

• How would this affect my spouse, partner, children or parents?

• What should I review with a tax professional?

• What should I review with a financial professional?

Frequently asked questions (FAQs) about retiring at 63

Can you retire at 63?

Yes, for some people. Retiring at 63 can be possible if you have enough accessible savings, income sources and health insurance options to support the years before Medicare and full retirement age.

How much money do you need to retire at 63?

There is no single amount. Start by estimating annual expenses, subtracting reliable income sources and calculating how much you need from savings each year. Then factor in health insurance, taxes, debt, inflation and how long retirement lasts.

Can I retire at 63 and collect Social Security?

Yes. If you retire at 63, you can generally claim Social Security retirement benefits, but claiming before full retirement age results in a reduced monthly benefit.³

Can I get Medicare if I retire at 63?

Most people are first eligible for Medicare at 65.⁴ If you retire at 63, you will need to plan for another health insurance option until Medicare begins.

Can I access my 401(k) if I retire at 63?

You may be able to access funds, depending on your plan rules. Because age 63 is past 59½, many retirement account withdrawals can avoid the additional 10% tax, depending on account type and rules.¹ Ordinary income taxes can still apply to pretax withdrawals.

Is it a mistake to retire at 63?

Retiring at 63 is not automatically a mistake. It can work for some people with accessible savings, health insurance options, manageable debt and flexible income sources. It can be more challenging if the plan depends on early Social Security claiming, consistent market growth or limited cash reserves.

What are the biggest mistakes people make when retiring at 63?

Common mistakes include claiming Social Security without comparing options, underestimating health insurance costs before Medicare, relying on one savings number, overlooking taxes, carrying high-interest debt and failing to plan for family responsibilities or purpose after leaving work.

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc.  Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company, a stock insurer*.

All investing involves risk, including the possible loss of principal, and there can be no assurance that any investment strategy will be successful.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

*Mutual of Omaha Insurance Company (the Company) is a stock insurer. Policyholders of the Company are members of Mutual of Omaha Holding Company (MOHC) of Omaha, Nebraska. The Company is an indirect, wholly‑owned subsidiary of MOHC.

Sources:

*Mutual of Omaha worked with research vendor, quantilope, to conduct research related to Decumulation – the strategic drawdown of assets during retirement years. This research had a sample size of 496 respondents aged 50+ who were already retired (n=327) or nearing retirement (n=169) within the next 10 years. Respondents who stated they did not have at least some assets to draw down during retirement were excluded from the survey. The research was conducted in a 10-minute online survey from October 6-15, 2025. All data included in this report are based on Mutual of Omaha proprietary research unless otherwise noted.

1. Internal Revenue Service. (2026, January 22). Topic no. 558: Additional tax on early distributions from retirement plans other than IRAs. https://www.irs.gov/taxtopics/tc558

2. Internal Revenue Service. (2025, December 11). Retirement topics — Exceptions to tax on early distributions. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions

3. Social Security Administration. (2026, January). Retirement benefits. https://www.ssa.gov/pubs/EN-05-10035.pdf

4. Centers for Medicare & Medicaid Services. (2026). Medicare & You 2026. https://www.medicare.gov/publications/10050-medicare-and-you.pdf

5. HealthCare.gov. (n.d.). Health care coverage for retirees. Retrieved May 2026, from https://www.healthcare.gov/retirees​