Planning your retirement age involves considering a number of personal, financial, and practical factors to determine the optimal time to stop working and begin receiving retirement benefits. Here are some of the top considerations to keep in mind when planning your retirement age:
Financial readiness: Your financial situation, including your savings and investment portfolio, is a key factor in determining when you can afford to retire. Make sure you have enough saved to cover your expected expenses in retirement.
Health: Consider your current and future health, including any health issues that may impact your ability to work or your longevity.
Social Security benefits: Social Security benefits are based on your age and earnings history, so it's important to understand the impact of delaying or starting early on your benefits.
Work benefits: If you have a pension or other work-sponsored retirement plan, understand the rules and requirements for accessing your benefits.
Life expectancy: Consider your family history and personal health factors to estimate your life expectancy. This will help you determine how long your savings will need to last in retirement.
Personal and lifestyle considerations: Think about your personal goals and what you want to do in retirement, including travel, hobbies, and volunteering. Consider your retirement as a transition to a new phase in life.
Government benefits: Consider any government benefits, such as Medicare, that you may be eligible for in retirement and how they may impact your overall financial picture.
Here is an example of how someone might plan their retirement age:
At age 60, Sarah has saved enough to cover her basic expenses in retirement and has a good understanding of her future healthcare costs. She is also eligible for full Social Security benefits at age 67.
Sarah decides to retire at age 65, which allows her to access her pension and retire with a comfortable income stream.
She plans to continue working part-time for another two years to supplement her income and maintain a sense of purpose.
It's important to remember that everyone's retirement plan will look different based on their individual circumstances, goals, and financial situation. It's a good idea to consult with a financial advisor to help you make informed decisions about your retirement age.
