As you get closer to retirement, it is likely that you have been involved in discussions about retirement planning. Talks may have been had about the employer percentages, being vested (or not), or outrage at motorhome retail prices. But, one thing is missing in retirement conversations: The target retirement date.
59.88 years old is the average retirement age as of February 2019. Many Americans will retire earlier or later than this age for many reasons. Surprisingly 76% of employees claim they will continue working beyond retirement age. 35% of these people say that they do so because they must.
Most people assume that sixty-five years is the ideal age. The right age is different for everyone. Find out what age is right for you, and then make the necessary steps to ensure you’re ready.
Take an early retirement
Early retirement is when a person stops being eligible for Social Security or pension benefits. Depending on the career, they can usually retire between 55 and 64 years. Although financial stability is a prerequisite for early retirement, personal factors like health issues or declining interest in a particular career can also influence the decision. Early retirement is often viewed as the ultimate goal. However, it can be more difficult than it seems.
You might consider early retirement, but it is a good idea to evaluate your financial and long-term health before making the decision.
Benefits of early retirement
- Stress reduction
- Enjoy more time
- Passion for your passions
- Potentially longer and healthier retirement
There are downsides to early retirement
- You have less time to grow your investments
- Living off savings and fixed income for longer periods of time is more affordable
- Potential loss of drive or purpose
Retirement delayed
The term late or delayed retirement applies to those who wait until sixty-five to retire. However, this age will change as the Social Security benefit date adjusts for baby boomers. There are good reasons to delay retirement until your later sixties or early seventies, regardless of whether you love your work or need to be financially secure. You have to weigh the benefits and costs of waiting, just like with early retirement.
Benefits of late retirement
- You have more time to grow your portfolio and investments
- Maximizing Social Security Payments
- A sense of purpose in your career
There are downsides to late retirement
- Deterioration in health due to work
- Retirement could be shorter
- Do not transition to retirement with your spouse or other peers
Investments and ongoing financial stability
Your ability to finance your retirement years will determine whether you choose an earlier, later, or regular retirement date. To ensure that you have the money you need to meet your retirement goals, consult a financial advisor. Discuss your lifestyle and long-term care options. Also, discuss plans for large-ticket items such as vacation homes or trips. You can then decide if your savings are sufficient to meet these needs.
These are the most popular forms of retirement savings:
1) Social Security
2) Pensions
3) IRAs
4) 401k
5) Annuities
You may have had one or more of these accounts throughout your working life. To calculate your projected retirement income, research, forecasting, and tracking each account is a must. This figure will give you an idea of your retirement age.
Concerns for your personal and health
Money is not everything. You may need to give up if you feel you are missing important family milestones, or that you are not spending enough time with your grandchildren.
Economists found that after 70, retirees spend an average of $122,000 on medical expenses. Saving as much money as possible to retire is a top priority.
Some people find that simplifying and downsizing their lives is enough to allow them to retire comfortably. Some people find that putting off retirement for a while allows them to save money without sacrificing their quality of life. Many people find that retirement communities are the best option when they consider the rising costs for in-home care, medication and catastrophic care costs.
What is the right retirement age? It all depends.
There is no perfect age to retire. To make the best decision about your retirement age, you must fully understand your financial situation, goals, and health.
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