What is “retirement age”? And how can you find out when you should retire based on your particular situation? That all depends on two things: how long you’re planning to live after retiring (your life expectancy), and how much money you’ll need each month once you stop working (your desired level of income). Let’s find out about the best age to retire.
When it comes to retirement planning, achieving a good standard of living in retirement is closely tied to reaching full retirement age. You can calculate your projected Social Security income by using this online calculator from the Social Security Administration—just enter your birth year, current age, and anticipated date of birth when you retire.
Retirement Planning
When it comes to retirement planning, achieving a good standard of living in retirement is closely tied to reaching full retirement age. In general, the average age for attaining full Social Security benefits is 63.
There are several factors that play into determining what age you should retire at, including your health and the age at which you want to start receiving benefits from Social Security. The earliest you can become eligible for benefits is 62; however, if you elect early eligibility (between ages 62 and 65), your monthly benefit amount will be reduced by 30% or more compared with what it would have been if you had waited until reaching full retirement age. This reduction also applies if someone else claims their survivor benefit on your record before reaching full retirement age (FRA).
Determining what Age you should Retire
To determine what age you should retire, you need to consider your finances as well as your health, family history, and personal desires.
Your finances are an important part of the decision for several reasons:
- Your ability to afford retirement depends on how much money you have saved up. The more time until retirement, the more time there is for investments (such as stocks) to grow in value and bring in more income. If you’re planning a big trip or another luxury item after retiring that will require money upfront before it returns any profit, then working longer might be a good idea so that the cost of those items can be paid off sooner rather than later.
- If taxes are going down at some point during retirement (for example when Social Security stops deducting tax), then having other sources of income may make sense even if they aren’t bringing in much extra cash now because this could increase savings over time by reducing taxes owed every year throughout retirement!
The Average Retirement Age
According to the U.S. Census Bureau, the average retirement age in the U.S. is 63, though this number is actually quite a bit lower than it was 25 years ago. In fact, if you took a look at your grandparents’ generation, they probably retired at around 62 or 63 on average (and some could have been younger).
This number is likely to continue to drop as more people choose to extend their working lives past the traditional retirement age of 65 (the current average).
The Best Age to Retire
The best age to retire depends on your particular situation and when Social Security determines you’re eligible for full benefits. Social Security retirement benefits start at age 62 but are reduced by up to 30% if you retire early. The longer you wait, the higher your benefit amount will be in the long run; however, since workers born after 1943 can only claim their benefits beginning at age 67 (or 66 if they’re still working), it’s worth considering how much income you’ll have coming in during those years as well.
Factors determining what age you should retire.
Should you retire at age 65? Or should you work until 70? Or is there another age that’s better for your finances and overall well-being?
The answer to this question depends on a number of factors, including:
- Your health—If you are in good health and have no plans to travel or do other activities that will require physical activity, then there’s no reason why you should not be able to continue working at full capacity until the traditional retirement age of 65. However, if you have any kind of ongoing medical condition (such as diabetes) or need regular medical treatments such as dialysis or chemotherapy, then it may be better for your health and well-being to retire earlier than the standard retirement age.
- Your family history—If both parents retired early due to ill health and passed away before 65, then it would probably also be wise for their children (your parents) to retire themselves when they reach 62 rather than wait until they reach 65.
Conclusion
When it comes to retirement planning, achieving a good standard of living in retirement is closely tied to reaching full retirement age. It’s important that you consider your finances as well as your health, family history, and personal desires when deciding what age you should retire at.
FAQS
1. When should I retire?
The best time to retire is when you’re ready to stop working. That could be at 62 or 70, depending on your health and financial situation. If you don’t need the income from your job, then it’s time to leave. If you are forced into retirement because of a layoff or medical condition, that’s not the best time either.
2. How much money do I need in savings?
There are no hard-and-fast rules about how much money you need in savings before retiring; it varies by individual circumstances and goals. A good rule of thumb is to try to replace 80% of your pre-retirement income with retirement savings, though this may not be possible if you are planning on paying off debt or funding college costs for children before retiring.
