How to Retire at 64: Step-by-Step Plan

Retiring at 64 may feel just within reach, close enough to start imagining life beyond the office, but early enough that careful planning still matters. The decisions you make in the final years before retirement can significantly shape your financial security for decades to come. From Social Security timing to healthcare coverage and investment strategy, every piece needs to work together. A clear, step-by-step plan can help turn the goal of retiring at 64 into a confident and realistic transition.

A financial advisor can offer invaluable help as you create or update your long-term retirement plan.

Step 1: Define Your Ideal Retirement

Retiring at 64 can be an exciting milestone, but before you focus on numbers, you need a clear vision of what retirement will actually look like. Defining your ideal lifestyle helps shape how much income you’ll need and how your savings should be structured. Without that clarity, it’s difficult to build a realistic financial plan.

Start by thinking about how you want to spend your time. Do you plan to travel extensively, relocate to a lower-cost area or pursue part-time work or consulting? Your day-to-day activities will influence your budget, healthcare needs and even where you choose to live.

Next, estimate your anticipated expenses. Some costs, such as commuting or retirement plan contributions, may decline once you stop working. Others that include travel, hobbies or healthcare could increase. Creating a detailed retirement spending estimate provides a foundation for determining how much income your savings and benefits must generate.

It’s also important to consider healthcare and longevity. At 64, you may not yet be eligible for Medicare, which typically begins at 65, so bridging coverage could be necessary. Planning for potentially decades of retirement income means factoring in inflation, market risk and long-term care considerations.

Defining your ideal retirement isn’t just about dreams, it’s about translating those goals into measurable financial targets.

Step 2: Calculate How Much You’ll Need to Retire

Generally, experts believe that the average retiree will need approximately 80% of their pre-retirement income to maintain their lifestyle. You make this amount up with savings and post-retirement income like Social Security benefits. So, if you earned a $100,000 salary, you would need about $80,000 each year to keep up your current lifestyle.

However, the real amount of money you need will depend on several factors, from what your expenses are expected to be like to what other sources of income you might have. You can use a retirement calculator to help you estimate what you might need or talk to a financial advisor who can help you build the right plan for your goals.

Step 3: Cut Your Expenses

Spending mindlessly can eat up your savings, leaving you with nothing for retirement. The sooner you put the reins on your wallet, the more you save in the long term. So, it’s never too early to start cutting down on costs.

That means tracking your spending habits. Experts recommend collecting between three to six months’ worth of expenditures, like bank statements, bills, debts and receipts. Then you split your spending up into “needs” and “wants.”

Needs are costs you can’t cut back on. You have to continue to pay them. In contrast, wants are things you enjoy, such as entertainment. With it all laid out, you can plan your need-based spending at the beginning of the month and pull money from your want category.

You can also draft a post-retirement budget. With it, you can extend your savings, ensuring you don’t run out of funds. Many of your essential expenses from before retirement will carry over. But it doesn’t hurt to review your expenses in the months leading up. In addition, you may also have some new ones. Healthcare costs may change, for example. If you need to pay for healthcare before you become eligible for Medicare, that gets added on.

You should also consider your tax responsibilities pre- and post-retirement.

Step 4: Grow Your Income

Retiring early, even by a year, can lead to some hefty costs. Saving at the rate you are may not be enough to support you. So, you may need to consider ways to bulk up your income.

Your peak earning years typically occur during your 40s and 50s. You can capitalize on that salary by asking for a promotion or raise at your workplace. Alternatively, you could pick up a side hustle. The goal here isn’t to raise the quality of your lifestyle but to make it easier to stockpile funds.

You should also focus on putting money away into your retirement plan. For some, this may mean maxing out your contributions to your account. Or, you may want to meet your employer’s match. If you’re 50 or older, you can also take advantage of catch-up contributions, which allow you to bypass normal contribution limits.

Step 5: Create Streams of Income

In the first step, we talked about varying types of retirement. Many people continue to do some type of work after they “retire” so they can continue to earn an income. But you don’t have to actively work to do that. Another option available to retirees is passive income. The IRS has certain rules that determine whether work is passive or not. For example, working under 500 hours in a trade or business activity might not count as material participation. Thus, making it passive.

Passive income provides you with steady money without costing you a ton of involvement. Some ways to earn passive income include:

Passive income gives you financial stability but doesn’t cut into your time or energy. Thus, freeing you up to enjoy your retirement. In addition, passive income can be subject to long-term capital gains taxes, which are cheaper than short-term capital gains taxes. So, you can save money.

Step 6: Prepare for Healthcare and Long-Term Care Costs

When you reach age 65, you can start receiving Medicare benefits. That is a relatively hard and fast rule unless you meet certain qualifications, like a disability. This program helps cover the cost of healthcare for retirees with both basic offerings and supplemental policies.

But if you retire before age 65, then you need to find alternative health insurance. Granted, if you retire at 64, that only leaves a year for you to cover. And for part of that year, you can take advantage of the Consolidated Omnibus Budget Reconciliation Act (COBRA). Through this, you have the option to extend your workplace’s health benefits for a minimum of 60 days.

However, not every retiree may have the option of COBRA. There are eligibility rules, and it costs more outside of employment because your employer no longer contributes to the plan. You can also hop onto your spouse’s plan if they still work, though. Or, you can purchase new health insurance, either through the Marketplace or a private insurer.

Step 7: Remove or Minimize Your Debt

Carrying debt into retirement can put unnecessary strain on a fixed or reduced income. As you prepare to retire at 64, reducing or eliminating outstanding balances can improve your monthly cash flow and provide greater financial flexibility. The fewer required payments you have, the easier it may be to manage market fluctuations and unexpected expenses.

Start by reviewing all outstanding obligations, including mortgages, credit cards, auto loans and personal loans. High-interest debt, such as credit cards, should generally be prioritized, as it can quickly erode retirement savings. Paying down these balances before leaving the workforce can reduce financial pressure once your income shifts from paychecks to withdrawals and benefits.

Mortgage decisions require more careful evaluation. Some retirees prefer to pay off their home entirely to eliminate a major monthly expense, while others may choose to maintain a low-interest mortgage and preserve liquidity. The right choice depends on your interest rate, cash reserves and overall retirement income strategy.

Finally, avoid taking on new long-term debt as retirement approaches. Large purchases financed with loans can limit flexibility and increase risk during market downturns. Entering retirement with minimal debt can provide peace of mind and help ensure that your savings are working toward supporting your lifestyle, not servicing interest payments.

Step 8: Determine the Best Time to Take Social Security

According to the Social Security Administration (SSA), an average of 65 million Americans received Social Security each month during 2021. And many of them are retirees. Almost nine out of 10 people at age of 65 and older receive benefits. The same report cites that Social Security makes up about 30% of elderly recipients’ income, but that varies depending on age and gender.

However, you don’t have access to 100% of your benefits until your full retirement age (FRA). This number depends on the year you were born. The SSA has an online calculator to help you find yours.

Suppose you were born after 1960. Your FRA is 67. The first month you can start collecting your benefits is 62. At that age, you would see a 30% reduction to your monthly retirement benefit. That reduction drops as you reach your FRA, but you still face that reduced amount.

In contrast, if you hold off collecting benefits until age 70, your Social Security payment will rise. That’s because the government offers delayed retirement credits. For every month after reaching your FRA until you hit 70, Social Security increases. It grows by two-thirds of 1%, for a total of 8% each year. So, if your FRA is 67 and you wait until 70, you get another 24% added to your monthly payment.

Step 9: Seek Guidance From a Financial Professional

With all the above steps, you can see a lot of thought retires. Failing to make a strong strategy can cost you in the long run. That’s where a financial advisor comes in. They offer a wide range of services that will improve your retirement plan.

For example, they can help you estimate the amount you need to retire and create benchmarks to reach it. That might mean reviewing your investment strategy, reducing the burden of taxes, drafting a budget or rebalancing your investment portfolio. Some financial professionals specialize in retirement, too. So, consider speaking to a qualified individual who knows how to guide you.

Step 10: Maximize Your Savings

As you approach retirement at 64, your final working years can have an outsized impact on your long-term financial security. Maximizing your savings during this period may help close income gaps and strengthen your portfolio before you begin withdrawals. Even incremental increases in contributions can make a meaningful difference over time.

Start by contributing as much as possible to tax-advantaged retirement accounts, such as a 401(k) or IRA. If you’re 50 or older, you’re eligible for catch-up contributions, which allow you to save beyond the standard annual limits. Taking full advantage of these higher contribution thresholds can help boost your retirement nest egg in the home stretch.

If you receive bonuses or other variable compensation, consider directing a portion toward retirement savings instead of lifestyle upgrades. Channeling windfalls into long-term investments can accelerate growth and improve income sustainability later. This strategy may be especially helpful if you’re slightly behind your retirement targets.

Take Advantage of Your Employer’s 401(k) Match

Many employers offer a matching contribution program along with their 401(k) plans. They may do this in one of two ways. First, they match your own contributions up to a certain percentage. Or, second, they match 100% of your contribution up to a specified percentage of your salary.

401(k)s face annual and lifetime contributions. For instance, it was $23,500 for the 2025 tax year and for 2026 it’s $24,500. But your annual limit does not include your employer’s matching contributions. Their additions only count toward the overall limit.

Invest Whatever You Can

A few strategic investments can really boost your savings. You can customize your strategy to fit your risk tolerance and timeline as well. For instance, investors who want predictable growth with little risk can consider municipal bonds, fixed index annuities and a universal life insurance policy. Even just switching to a high-yield savings account can make a difference over several years.

If you’re planning for retirement young, you can probably accept more risk. In that case, you can think about standard options like stocks, bonds and exchange-traded funds (ETFs). Of course, anyone new to investing should consider seeking out guidance. Speak to a financial advisor if you have questions.

Utilize Alternative Retirement Accounts

Traditional 401(k)s aren’t the only retirement accounts out there. Putting your money into different options can help you top up your savings. These are some valuable options if you max out your 401(k):

Incorporating alternative retirement accounts into your financial plan can enhance your retirement strategy by offering diversification and potential tax benefits. Each type of account has its own set of rules and advantages, so it’s essential to evaluate how they fit into your overall retirement goals.

Bottom Line

Retiring at 64 requires more than picking a date, it takes thoughtful planning across every aspect of your financial life. From defining your ideal retirement and estimating expenses to managing debt, optimizing Social Security and maximizing savings, each step plays a role in building sustainable income. Careful preparation can help reduce uncertainty and protect against market or healthcare risks.

Retirement Tips

Planning for retirement may sound easy, but it takes more than just saving. Consider speaking with a financial advisor to come up with your perfect strategy, who has the expertise to make a huge difference in your plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
A lot of estimation goes into retirement planning. Technology can make it easier. Try out a retirement calculator to start thinking about your needs. A Social Security calculator can also help you guess at your benefit amount.