My assumption is that a couple (say) would be running with pretty thin margins, even assuming no mortgage interest or rent and modest living, on $40,000 a year

My assumption is that a couple (say) would be running with pretty thin margins, even assuming no mortgage interest or rent and modest living, on $40,000 a year and a fairly low CoL area, so losing another $7k (that's per person, right, not the max-out-of-pocket for the whole plan? Or maybe your exchange plans are way better than ours) would be be very painful, at best. A forever-alone hermit living in a rural trailer park might be another story—there are definitely some circumstances I can imagine in which it might be kinda OK to try to retire before Social Security and Medicare kick in on $1m savings, but not ones that involve anything like a normal life. And sure, you may not be missing payments thanks to the $1m in the bank, but if you start eating that principle too early (=before you're 60ish years old, at a minimum) you might find yourself needing to get a job after being out of the work force for (say) 10 years and while possibly dealing with serious, chronic health problems. I'm not sure how disability works when you haven't worked for a few years due to retiring, and have six-plus figures in the bank still, but my guess would be "it doesn't", until you are, in fact, ruined.