You’re 58, make $95K, and have $250K in your TSP. Can you retire at 62?
It’s the question that keeps capable people working years longer than they need to: is $250,000 enough? Asked that way, the answer feels like no. But that’s the wrong question, because your TSP is one of three income legs, and for a career federal employee it’s often the smallest. At 62 you can turn on a FERS pension (with a built-in 10% bonus), Social Security, and TSP withdrawals at the same time — and keep your FEHB health coverage. Add the three legs and compare them to what you actually spend, and 62 looks very different. Here’s the real readiness math, with a calculator that gives you a number.
1. The right question
“Is $250,000 enough to retire?” is unanswerable, because it treats your TSP as your whole retirement. It isn’t. The right question is: do my three income legs, combined, replace enough of my income to live on? A private-sector worker with $250,000 and nothing else would be right to worry. A federal employee at 62 with a full career has two additional lifetime, inflation-adjusted checks that usually dwarf the TSP. Let’s build the number leg by leg.
2. Leg 1: the FERS pension (with a 10% bonus)
Your FERS pension is based on your high-3 average salary and years of service. The standard multiplier is 1% per year — but there’s a reason 62 is special:
On a $95,000 high-3 with, say, 25 years of service, that’s 1.1% × 25 × $95,000 = about $26,125 a year for life — versus $23,750 at the 1% rate. That single 0.1% bump, available only at 62+ with 20+ years, is worth thousands a year forever. This is why walking out at 61 with 20 years can be an expensive mistake.
3. Leg 2: Social Security at 62
62 is the earliest you can claim Social Security — and claiming that early comes at a permanent cost.
With a full retirement age of 67, claiming at 62 permanently reduces your benefit to about 70% of your full amount. A benefit worth $2,000 at 67 becomes roughly $1,400 at 62 — for life. That doesn’t make claiming at 62 wrong; it makes it a decision. If your pension and TSP can cover a few years of the gap, delaying even to 64–65 raises this check permanently. Weigh it deliberately — see when to claim.
4. Leg 3: the TSP
Now the leg you were worried about. A widely used planning guideline is that you can withdraw about 4% of your balance in the first year and adjust for inflation thereafter with a good chance of not running out over a 30-year retirement. On $250,000, that’s roughly $10,000 a year, or about $833 a month. Is that the whole retirement? No. Is it a meaningful top-up on two lifetime pensions? Absolutely. And your balance keeps growing in your last working years — the safe-withdrawal question is worth understanding before you lock in a rate.
5. Add up your three legs
Enter your numbers. The calculator estimates your FERS pension, adds your Social Security and a 4% TSP withdrawal, and shows the total — plus how much of your salary it replaces.
Your numbers
Pension uses 1.1% × high-3 × years for 62+ with 20+ years (1% otherwise), before any survivor election or deductions. Income is gross of taxes. Replacement rate is total income ÷ high-3. Get an official pension and Social Security estimate before deciding. Not advice.
6. The replacement-rate test
Planners commonly target 70% to 80% of pre-retirement income, because several costs fall away in retirement: you stop saving for retirement, payroll (FICA) taxes end on earned income, and commuting and work expenses disappear. So replacing 100% of your salary usually isn’t necessary to keep your lifestyle. Many career feds retiring at 62 land in or above the 70–80% band once all three legs are counted — which is why the honest answer to “can I retire at 62?” is far more often yes than the TSP balance alone would suggest.
7. Why FEHB quietly makes 62 work
Health insurance is what forces many private-sector workers to grind until 65 and Medicare. Federal employees don’t face that wall: if you were enrolled in FEHB for the five years before retiring and leave on an immediate annuity, you keep FEHB in retirement — with the government still paying its share of the premium. That single benefit removes the biggest financial obstacle to retiring before 65 and is a core reason 62 is realistic for feds when it isn’t for others. At 65 you’ll coordinate FEHB with Medicare, but your coverage never lapses.
8. If you fall short
If the calculator lands you under your target, you have high-leverage levers — and you don’t need all of them:
- Work to 63–65. More pension years, more TSP growth, and a bigger (undiscounted) Social Security check.
- Delay Social Security even a couple of years while your pension and TSP bridge the gap.
- Max the TSP now, including catch-up and the age 60–63 super catch-up.
- Check your date against your MRA and confirm the 1.1% bonus applies before you walk.
Run the whole picture through am I ready to retire this year before you commit.
9. Frequently asked questions
Can I retire at 62 with $250,000 in my TSP?
For most career federal employees, yes — because the TSP is only one of three income legs. At 62 with a solid work history you also collect a FERS pension and Social Security, both lifetime and inflation-adjusted. A $250,000 TSP adds roughly $10,000 a year at a 4% withdrawal, but the pension and Social Security together often provide the larger share of your income. Whether 62 truly works depends on your total replacement rate — all three legs versus your current spending — not on the TSP balance in isolation.
Why is retiring at exactly 62 a sweet spot for federal employees?
Two reasons. First, if you retire at 62 or older with at least 20 years of service, your FERS pension multiplier increases from 1% to 1.1% per year of service — a 10% larger pension for the same career. Second, 62 is the earliest Social Security age, so all three income legs can turn on at once without needing the FERS annuity supplement to bridge a gap. Combined with the ability to carry FEHB health coverage into retirement, 62 is often the cleanest, most efficient federal retirement age.
How much does claiming Social Security at 62 cost me?
Claiming at 62 permanently reduces your benefit to about 70% of your full amount if your full retirement age is 67 — roughly a 30% haircut for life. On a benefit that would be $2,000 a month at 67, claiming at 62 yields closer to $1,400. The trade-off is real: you get checks sooner, but every check is smaller forever. If your pension and TSP can cover expenses for a few years, delaying Social Security raises your guaranteed lifetime income, which matters most in a long retirement.
What income replacement rate should I aim for?
A common planning benchmark is 70% to 80% of your pre-retirement income, because some costs fall in retirement — you stop saving for retirement, payroll taxes drop, and commuting and work expenses disappear. A federal employee retiring at 62 with a full career often lands in or above that range once the pension, Social Security, and TSP are combined. The calculator on this page shows your estimated replacement rate so you can see where you stand against that target and adjust before you set a date.
Does FEHB continue if I retire at 62?
Yes, if you meet the requirements: you generally must be enrolled in FEHB for the five years immediately before retirement (or since your first opportunity to enroll) and retire on an immediate annuity. If you do, you keep the same FEHB coverage in retirement with the government continuing to pay its share of the premium — one of the most valuable federal benefits and a major reason retiring at 62 is financially workable. At 65 you’ll coordinate FEHB with Medicare, but your FEHB does not end.