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Doctors have the potential to earn a good salary after graduating medical school and completing their residency — the average primary care physician in the U.S. earns about $260,000, according to a 2022 report by Medscape. But they also typically end up owing hundreds of thousands dollars in student loan debt.

Getting the education and training required to practice medicine in the U.S. is a long and expensive endeavor. Fortunately, there are forgiveness programs and repayment options that can help. Read on to learn about eight medical school loan forgiveness programs that doctors can use to relieve their student debt burden, plus other methods that could make it easier to manage student loan payments.

Physician Student Loan Forgiveness

According to the Association of American Medical Colleges (AAMC), the average medical school debt in 2024 was more than $200,000. Add the cost of interest, and some doctors can end up paying $400,000 or more over the life of their loans.

If you are dealing with medical school loans, here are some of the student loan forgiveness programs that might help you pay down — or even erase — your debt.

1. Public Service Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) program was created by the Department of Education to encourage college graduates, including doctors, to consider public service careers.

Doctors who make 120 qualifying student loan payments while working full-time for a qualifying government, nonprofit, or public health employer, may be eligible to have their remaining federal loan balance erased through the PSLF program. The amount that’s forgiven is not subject to federal taxes.

Participants in the PSLF program must meet several requirements. Only Federal Direct Loans are eligible. (Federal Family Education Loans, Parent Plus loans, and Perkins loans must be consolidated to a Direct Consolidation Loan to qualify.) And you must be on a qualifying repayment plan, such as an income-driven repayment plan.

You can get more information about PSLF at the Federal Student Aid website. While you’re there, you can also use the loan simulator to get a personalized projection to help determine if PSLF makes sense for you based on your financial and career goals.

2. National Health Service Corps Loan Repayment Program

The National Health Service Corps Loan Repayment Program (NHSC LRP) offers doctors and other eligible health care providers an opportunity to have their qualifying federal or private student loans repaid while also earning a competitive salary in exchange for serving in communities with limited access to care.

Award amounts may vary based on the health care field you’re in. For instance, primary care providers who make a two-year full-time commitment to working at an NHSC-approved site can erase up to $75,000 in student debt. And those who serve half-time for two years may be able to cancel up to $35,000 in student loans. (If you pass a Spanish-language competency assessment, you may be eligible for an additional amount.) These awards are not subject to income tax.

Find out more about NHSC LRP program requirements to see if you qualify.

3. National Health Service Corps Students to Service Loan Repayment Program

The National Health Service Corps Students to Service Loan Repayment Program (NHSC S2S LRP) offers eligible fourth-year medical students an opportunity to receive up to $120,000 (in $30,000 installments) in tax-free student loan repayment funds to put toward qualifying federal or private student loans.

To enter the program, participants must commit to working full- or half-time at an NHSC-approved site in an underserved area for at least three years. After the initial three-year contract is completed, you may be eligible for a service extension.

Learn more information about NHSC S2S eligibility and how to apply.

4. Military Health Professionals Student Loan Repayment Programs

Several branches of the U.S. military offer medical school loan repayment programs to doctors who serve in the military. Benefits may be used to repay qualifying federal or private student loans. Eligibility requirements and benefit amounts may vary, so contact your service branch (Army, Navy, National Guard, and so on) for details and specific information.

5. Department of Veterans Affairs (VA) Specialty Education Loan Repayment Program

The VA’s loan repayment program is for recent graduates of accredited medical or osteopathic schools who are currently in a residency that’s been identified as experiencing a shortage. Eligible specialties include psychiatry, family practice, internal medicine, emergency medicine, gastroenterology, urology, and geriatric medicine. (Other specialties may be considered on an individual basis.)

The loan repayment amount is $40,000 per year for qualifying federal and private student loans, with a lifetime maximum of $160,000. In exchange, recipients agree to serve in a clinical practice at a VA facility for a minimum of two years.

6. National Institutes of Health Loan Repayment Programs

The National Institutes of Health (NIH) Loan Repayment Programs were established by Congress to recruit and retain highly qualified health professionals in biomedical or biobehavioral research careers.

These NIH programs are for medical professionals in a variety of fields, including pediatric research, health disparities research, and clinical research. Payments may be up to $50,000 annually and can be applied to qualifying federal or private educational debt.

7. Indian Health Service Loan Repayment Program

This program allows Indian Health Service (IHS) clinicians to repay up to $50,000 of their eligible health profession education loans in exchange for a two-year service commitment to practice in health facilities serving American Indian and Alaska Native communities. After their initial commitment is completed, participants can apply to extend their contract annually until their qualified federal or private student loans are repaid.

Interested physicians can applyy online.

8. State Medical Student Loan Forgiveness Programs

A number of states offer student loan repayment options to physicians and other health care professionals. Use the Association of American Medical Colleges’ searchable database to find any med school loan forgiveness and repayment opportunities in your state.

In addition, the National Health Service Corps provides grants to all 50 states and the U.S. territories through its State Loan Repayment Program. These grants allow individual states to offer their own repayment programs with a goal of incentivizing health care providers to work at their facilities. You can find out more about the available programs, eligibility requirements, and practice sites to see if one is near you.

Other Strategies to Repay Medical School Debt

If you aren’t eligible for a medical student loan forgiveness program, or you can’t find one that’s a good fit for your situation, there are other methods for managing loan payments that you may want to consider.

Here are some repayment options to explore.

Income-Driven Repayment (IDR) Plans

With a federal IDR plan, your monthly federal student loan payments are based on your discretionary income and the size of your family. So, for instance, while you’re earning a medical resident’s salary, an IDR plan could make your payments more affordable.

Under an IDR plan, you must recertify your income every year. That means if your income increases as you advance in your career, your payments may go up. However, your monthly payments will never be more than they would be under the federal 10-year Standard Repayment Plan.

You also may qualify for federal loan forgiveness with an IDR plan. If you reach the end of your payment term (which is generally 20 or 25 years), and you still have a balance, the government will forgive the remaining amount due. You won’t owe federal income taxes on the forgiven amount.

Federal Loan Consolidation

With a Federal Direct Consolidation Loan, borrowers who have federal loans from their undergraduate and medical school degrees can combine them into one loan. The interest rate of the consolidation loan is based on the weighted average of your current loan rates, so you may not save any money, but if you choose a longer loan term, you can lower your monthly payments (though you may pay more interest overall). Consolidating your federal loans may also give you access to additional federal repayment options like income-driven repayment.

There are pros and cons to student loan consolidation to consider, depending on your overall payment strategy. Be sure to compare the costs and benefits.

Employer Repayment Programs

Many employers, including health care facilities, offer student loan repayment assistance as a tool for recruiting and retention. If your employer offers an educational assistance program (EAP), you may be able to receive tax-free contributions to help pay the principal and interest on qualified federal and private student loans. You can get up to $5,250 in tax-free EAP benefits each year. (Any assistance provided above that threshold will be taxable as wages.)

Student Loan Refinancing

If you have private student loans, or you have federal loans and you aren’t pursuing federal benefits such as forgiveness, refinancing your student loans with a private loan is another alternative you might want to consider.

Student loan refinancing is offered by private lenders, such as banks, credit unions, and online lenders. The lender pays off your existing student loan balances and gives you a new private loan that ideally has a lower interest rate and more favorable terms. (It’s important to note that refinancing federal loans makes them ineligible for federal forgiveness and other federal benefits.)

If you decide to refinance only some of your loans — such as your private loans — it may make sense for your situation, especially if refinancing student loans could save you money.

A student loan refinancing calculator can help you see what your monthly payments might be.

Recommended: Student Loan Refinancing Guide

The Takeaway

The average doctor typically owes hundreds of thousands of dollars in student loan debt, and paying it off can be a challenge long after they graduate, complete their residency, and begin practicing medicine.

That’s why student loan repayment and forgiveness programs for doctors can be so helpful. Physicians who are willing to work for a nonprofit organization, pursue a career in public service, or commit to practicing in an underserved area may be able to get their student loans forgiven.

For those doctors who don’t qualify for forgiveness, there are repayment options that may reduce or make it easier to manage monthly student loan payments. These include income-driven repayment, federal loan consolidation, and student loan refinancing. Thoroughly researching all the available options can help doctors choose the best method for tackling their student loan debt.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

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SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

SOSLR-Q424-014

Paying off student loans can feel overwhelming, but with the right strategies, you may be able to negotiate a more manageable solution. Whether you’re struggling with payments or looking to settle your loan for less than the total amount owed, understanding the negotiation process can open up options you didn’t know were available.

Let’s look at how the student loan payoff process works. We’ll explore when negotiation might be a viable option, how to approach lenders, and tips for reaching a favorable agreement.

What Student Loan Settlement Is

Student loan settlement refers to an agreement between the borrower and lender where the borrower pays a lump-sum amount that is less than the total balance owed to settle the debt. This option is generally available for borrowers who are in default or facing severe financial hardship.

You’ll go into default after a certain number of days, depending on your loan type (270 days for some federal loans; Perkins loans go into default immediately).

Defaulting on student loans can lead to several negative consequences, including:

•   Your entire unpaid loan balance becomes immediately due (called acceleration)

•   Tax refunds and federal benefit payments may be withheld to go toward your defaulted loan(s)

•   Garnished wages (your employer must withhold a portion of your pay to send to your loan holder)

•   No deferment or forbearance options available to you (more on these later)

•   Losing eligibility for other federal student loan benefits, including the ability to choose repayment plans

•   Losing eligibility for additional federal student aid

•   Damaging credit

•   Your loan holder taking you to court, which could result in court costs and collection and attorney’s fees

•   Withheld official college transcripts

How Student Loan Settlement Works

Settling loans can reduce what you owe and eliminate future repayment obligations. Here’s how it works in a nutshell:

1.    You negotiate with your loan servicer or a collections agency and offer to make a lump-sum payment.

2.    The loan servicer or collections agency agrees to the terms.

3.    You pay an amount lower than what you owe in outstanding loans, collection fees, and interest charges.

4.    The servicer or agency marks the debt as settled, and your loan obligation is satisfied.

5.    The default status comes off your credit report (but note that the settlement can still affect your credit).

How to Be Eligible for Student Loan Settlement

You can only qualify for a student loan payoff if your federal student loans are in default. If you have loans in good standing, you can’t qualify for a settlement request. It’s also important to note that federal student loan settlements are rare, because it’s difficult to get rid of student loans even if you go bankrupt.

You might also be able to negotiate a settlement with private student loans if you’re in default (which usually means you’re 120 days late on payments). Check with your lender for a definition of default on your particular private student loans.

Private student loan lenders cannot pursue the money owed them in the same way that federal loan servicers can, so they may be more likely to settle the loan(s).

Recommended: How to Get Student Loans Out of Default

Steps to Negotiating Student Loan Payoff

Can you negotiate student loan payoff? In other words, can you settle student loans?

Absolutely! Read on to learn the steps on how to settle student loan debt.

Step 1: Gather Your Documents

You must show that you can’t repay your student loans, which may include gathering the following:

•   Health records, such as your mental or physical illness diagnosis that makes it difficult for you to hold a job

•   Pay information, such as pay stubs, W-2 forms, and tax returns

•   Financial records, including information about a potential inheritance that could help pay your debts

•   Credit reports

Step 2: Contact the Agency and Negotiate Settlement Terms

Your loans typically go into collections after you go into default. You can call or email the collections agency, lender, or loan servicer and tell them you want to settle the debt by paying a portion of the total amount you owe. Describe the challenges you’re facing, such as financial challenges or medical problems.

Federal student loans often offer four settlement options:

•   Principal and interest: You only pay the outstanding principal and interest.

•   Principal and 50% interest: You pay the outstanding principal and 50% of interest, with collection costs waived.

•   90% principal and interest: You pay 90% of the outstanding principal and interest charges, with collection costs waived.

•   Discretionary compromise: You pay less than what you would owe under the other three standard options.

You may be able to settle private student loans for 40% to 70% of the amount you owe. Check with your lender or collection agency for more information.

Step 3: Review and Make Your Payment

You’ll receive a letter about your settlement terms. The letter will outline the amount you have to pay and the deadline. After you receive the letter, make your lump sum payment.

Note that if you don’t pay by the deadline, the agreement will be canceled and you’ll owe the total outstanding amount, interest, and fees. Keep track of all paperwork involved in the settlement.

Alternatives to Student Loan Settlement

Instead of opting for a loan settlement, consider repaying your loans in full. Repaying them in full may prevent you from having to go through loan repayment that could drag on for years. If you can’t repay them in full, consider deferment or forbearance, income-driven repayment plans, or student loan refinancing, which we’ll outline below.

Deferment or Forbearance

A student loan deferment or forbearance might be a good alternative to settlement. Here’s the definition of each:

•   Loan deferment: You temporarily stop making payments.

•   Loan forbearance: You stop making payments or reduce your monthly payments for up to 12 months.

It’s important to note that both are temporary situations and that you can accrue interest while your loan is in either forbearance or deferment.

Income-Driven Repayment Plan

An income-driven repayment (IDR) plan bases your monthly payments on your income and family size.

There is currently one income-driven repayment plan open to everyone: Income-Based Repayment (IBR). With this plan, borrowers typically pay 10-15% of their discretionary income, with payments adjusted annually. IBR plans offer loan forgiveness after 20-25 years of qualifying payments, depending on when the loans were issued. It’s a helpful option for those with high student loan debt compared to their income, ensuring payments remain affordable.

Note that there are two other income-driven repayment plans available — Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR). However, you must currently be enrolled in the Saving on a Valuable Education (SAVE) plan in order to apply.

Student Loan Refinancing

You may also consider refinancing your student loans instead of negotiating student loan debt. Student loan refinancing means a private lender pays off your existing federal or private student loan(s). A private lender might be a bank, online lender, or another type of financial institution. It’s worth shopping around for a private lender that offers a better:

•   Term

•   Interest rate

•   Monthly payment

Refinancing does have some downsides. You’ll lose access to federal repayment plans (such as the standard, graduated, and extended repayment plans, and income-driven plans) and Public Service Loan Forgiveness, and you’re no longer eligible for federal repayment protections or grace periods (where student loan payments haven’t yet started).

Also, it may not be possible to refinance student loans that are already in default. However, borrowers can rehabilitate or consolidate defaulted federal loans to regain eligibility for refinancing. Private loans in default may require negotiation with the lender before refinancing becomes an option.

Recommended: Does Refinancing Student Loans Save Money?

The Takeaway

If you’re wondering if you can negotiate a student loan payoff, the answer is yes, but it’s often difficult to get approved. Therefore, it’s important to consider all your options, including paying off your entire existing loan balance, refinancing, or another option listed above.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQs

What are the benefits of student loan settlement?

The biggest benefit of student loan settlement is that you pay an amount lower than what you owe in loans, fees, and interest charges. Once you follow the settlement terms, your loan is settled and your obligation to pay the loan “goes away.” The default also gets removed from your credit report.

What are the downsides of student loan settlement?

The largest downside of student loan settlement is simply that they don’t happen that often. Federal loans are extremely difficult to discharge, even in bankruptcy. Student loan settlement can harm your credit score, as settled debts are reported as less than fully paid. Additionally, forgiven amounts may be considered taxable income, increasing your tax liability.

Will settling student loans hurt your credit score?

Yes, settling student loans can hurt your credit score. When a loan is settled for less than the full amount, it’s reported as “settled” rather than “paid in full,” indicating you didn’t meet your original repayment terms. This can negatively impact your credit history and future borrowing potential.

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SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

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SOSLR-Q424-015

For many, age 62 is an appealing time to step away from the workforce. You’re old enough to start claiming Social Security benefits, yet still young enough to enjoy pursuing hobbies, travel, and spending time with family. But deciding to retire at 62 is a complicated choice that requires looking carefully at your financial situation, health care needs, and lifestyle goals. Below are some guidelines that help you decide whether you can (or should) retire at 62, plus a look at the pros and cons of retiring on the early side.

Factors to Consider Before Retiring at 62

If you’re thinking about retiring at 62, you’ll want to explore how it will impact your Social Security benefits, health care costs, living expenses, and lifestyle. Let’s look at each factor in more detail.

Social Security

At 62, you’re eligible to start claiming Social Security benefits, but doing so comes with a caveat. Opting for early benefits reduces your monthly payments compared to waiting until your full retirement age, which is between 66 and 67, depending on your birth year. Claiming benefits at age 62 can permanently reduce your monthly payments by up to 30%, which can significantly impact your long-term financial security.

You can check your Social Security account to see how much you’ll get when you apply at different times between age 62 and 70. If you don’t already have an account, you can create one at Login.gov.

💡 Quick Tip: Want to lower your taxable income? Start saving for retirement with a traditional IRA. The money you save each year is tax deductible (and you don’t owe any taxes until you withdraw the funds, usually in retirement).

Health Care

Health care is a major consideration for anyone looking to retire at 62. Medicare eligibility starts at 65, leaving a potential three-year gap in coverage. That means you’ll need to secure health insurance, which can be costly. Options include purchasing private insurance, relying on a spouse’s employer-sponsored plan, or exploring coverage through the Affordable Care Act marketplace. Evaluating your health care needs and the associated costs is crucial before deciding to retire early.

Expenses

To determine if you can retire at 62, you’ll need to understand your post-retirement expenses, so that you can identify how much you may need in retirement savings. While some costs may decrease, such as commuting or work-related expenses, others may increase, like travel, hobbies, and medical care. Creating a detailed budget can help you estimate your monthly expenses and determine if your savings and income streams will be sufficient to cover them. When projecting your annual expenses, keep in mind that many expenses will go up over time due to inflation.

Recommended: How Much Do You Need to Retire? 3 Rules of Thumb to Consider

Lifestyle Change

Retiring at 62 isn’t just a financial decision; it’s a lifestyle shift. Leaving the workforce means more time for hobbies, travel, and family, but it can also mean a loss of routine, purpose, and regular social interaction. Many retirees struggle with the psychological transition and find themselves missing the structure and camaraderie of the workplace. It’s wise to think about how you’ll fill your days and stay engaged without your old routine. You’ll also want to make sure that your financial resources will support your desired post-retirement lifestyle.

Are You Financially Ready to Retire at 62?

To figure out if you can retire at 61, you’ll need to assess your assets and how far they will take you. Here’s how.

Savings and Investments

The earlier you retire, the longer your nest egg needs to last. Do you have enough money set aside in savings and investments to support your desired lifestyle for 30-plus years? As a general rule of thumb, experts recommend having eight to 10 times your annual income saved by the time you retire. For example, if you earn $60,000 annually, you should have $480,000 to $600,000 saved. If you’re looking to retire at 62, it can be wise to shoot for the higher end of that range or even beyond that. This can help make up for fewer earning years and (likely) more years to spend your savings.

If your savings aren’t quite where you’d like them to be, there are ways to catch up, such as working a bit longer or adjusting your investment strategy.

💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

Retirement Withdrawals

Understanding how much you can withdraw from your retirement savings each year is crucial to avoid outliving your money. One guideline to consider is the 4% withdrawal rule. This rule suggests withdrawing 4% of your retirement investments (such as a 401k or an online Roth IRA) annually, adjusting that percentage each year for inflation, to fund a 30-year retirement.

As an example, let’s say you want to retire at 62 with $500,000 saved. If you follow the 4% rule, you’d only be able to withdraw $20,000 your first year in retirement, or just under $1,700 per month. That could constrain your lifestyle, though it doesn’t include what you may get from Social Security.

When calculating your annual retirement withdrawals, keep in mind that the 4% rule isn’t foolproof, especially during market downturns. You may need to adjust withdrawals based on your expenses and the performance of your investments.

Pros and Cons of Retiring at 62

To decide if you should retire at 62, it’s a good idea to weigh both the advantages and disadvantages of early retirement. Here’s how they stack up.

Benefits of Retiring at 62

•   More time for personal goals: Retiring early gives you extra time to pursue passions, hobbies, or travel while you’re still relatively young.

•   Less work-related stress: Exiting the workforce can alleviate stress and allow you to focus on your well-being.

•   Family time: Retiring early lets you spend more quality time with loved ones, which might include helping with grandchildren or caregiving for aging parents.

•   Opportunities for a second act: Early retirement can free up time to start a small business, volunteer, or explore a new career on your terms.

Drawbacks of Retiring at 62

•   Reduced Social Security benefits: Claiming Social Security at 62 permanently reduces your monthly benefits.

•   Health care costs: Without Medicare coverage, health insurance expenses can take a significant bite out of your savings.

•   Longevity risk: Retiring early increases the risk of outliving your savings, particularly if you live well into your 80s or 90s.

•   Missed earnings: Leaving the workforce early means missing out on additional income, savings, and potential employer contributions to retirement accounts.

Tips to Live Comfortably If You Decide to Retire at 62

If you’re looking to retire at 62, keep these retirement planning strategies in mind.

•   Create a budget: Before you leave the workforce, it’s a good idea to track your expenses and come up with a realistic budget for your retirement years. Keep in mind that some expenses (like commuting to work) will go down, while others (like health care and discretionary spending) will likely go up once you retire.

•   Consider downsizing: To make your retirement savings go further, you might look into moving to a smaller home or a more affordable area to reduce housing costs.

•   Explore part-time work: Even if you choose to retire from your full-time job, you don’t have to fully exit the workforce. You might explore part-time work or consulting to supplement income while maintaining flexibility.

•   Delay Social Security (if possible): Consider using savings to bridge the gap and delay claiming Social Security benefits for a higher payout. The amount you can receive will be higher the longer you wait to apply, up until age 70.

•   Stay healthy: Prioritizing preventive health care and maintaining an active lifestyle can help minimize medical expenses.

•   Maximize investments: It’s a good idea to keep your investments diversified and regularly review your portfolio with a financial advisor.

The Takeaway

Retiring at 62, the earliest age you can receive Social Security benefits, may be a viable option. But it’s important to look before you leap. To determine if you can realistically retire at 62, assess your current assets, estimate future income, consider your preferred lifestyle, and determine how you’ll pay for health care until Medicare starts. You’ll also want to weigh the benefits of retiring early (such as reduced stress and more personal time) against the potential drawbacks (like reduced income and less social interaction).

If your dream is to retire early, you’ll want to implement strategies that can help you achieve your goal. With the right preparation, retiring at 62 can be a rewarding new chapter of life.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

FAQ

How much money do you need to retire at 62?

The amount you need to retire at 62 depends on your lifestyle, health care costs, and expected longevity. As a general rule of thumb, financial experts recommend having eight to 10 times your annual income saved before retiring. For example, if you earn $70,000 annually, you’ll need at least $560,000 to $700,000. To retire at 62, you generally want to aim for the higher end of that spectrum to make up for fewer working years and, presumably, more years to spend your savings.

How much social security will you get if you retire early at 62?

If you retire at 62, you can claim Social Security benefits, but your payments will be reduced by as much as 30%. The exact reduction will depend on your full retirement age (FRA), which is somewhere between age 66 and 67, depending on your birth year. You can see how much you’ll get when you apply at different times between age 62 and 70 by logging into your Social Security account (if you don’t have one, you can create one at SSA.gov).

Is retiring at 62 a good idea?

Retiring at 62 can be a good idea if you’re financially prepared and eager to enjoy more leisure time. It allows for early access to Social Security benefits and freedom from work-related stress. However, early retirement also comes with challenges, which include reduced Social Security benefits, a health insurance gap before Medicare eligibility at 65, and a longer retirement period to fund.
To determine if you should retire at 62, it’s important to consider your savings, expenses, and desired lifestyle. If you have sufficient resources to fund early retirement, retiring at 62 can be rewarding. Otherwise, waiting may offer greater financial stability.

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