At what age are you going to retire? This is a question that plagues many, and it’s something we begin to think about from very early in our career. One of the worst things you can do is select an arbitrary age just because it sounds good; research is always the key to a firm decision. If you choose the wrong age, you face the potential to run out of money or regret working too long when you had enough saved much earlier.
When making this big decision, we think there are three primary considerations:
- Also Read: 3 Reasons Certain Federal Employees Can Retire Years Earlier Than Their Peers Without Penalties
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1. Life Expectancy
This isn’t something that anybody enjoys, but we recommend thinking about your health and how long you expect to live. For those in great shape and with a good family history, you’ll be planning a longer retirement than somebody in poor shape and with a lousy family health history. If you fall into the latter category, an earlier retirement will allow you more time to enjoy life towards the end.
Recently, the Aegon Center for Longevity and Retirement said that four in ten people now retired were forced into the decision earlier than initially planned. Health problems are the most common reason for early retirement, so consider your health and the likelihood of developing issues.
2. Savings
While some people have good savings, others are forced into working longer because they need the time. Unfortunately, we can’t provide a single number for the amount you need to retire. It depends on your spending habits and plans for retirement (and expected length of retirement); one Charles Schwab survey predicted a requirement of $1.7 million in savings for the average worker.
To find out the status of your potential retirement, we recommend using a retirement calculator. After entering your retirement age, it will show how much you need to save per month. Play around with different ages and compare what you need to save next to your current savings plan.
3. Social Security Claiming Age
For millions of people, Social Security is an integral part of retirement. Not everybody retires and immediately starts claiming, but there’s certainly a relationship between the two. Full retirement age (FRA) is as follows:
• Born after 1960 – 67
• Born before 1960 – 66 (or 66 and a handful of months)
You can wait until FRA to get the full benefit amount or claim after 62 to get a reduced amount. If you’re able to wait until the age of 70, we highly advise it since you can potentially earn one-third more per month.
Again, the time you start claiming Social Security benefits will depend on your current savings, life expectancy, and other plans. Some people hold off on benefits because they want bigger checks (and this also means waiting on retirement too).
Summary
We know it’s stressful, but we urge you to consider retirement carefully. Most Americans are behind on retirement savings, so don’t panic. Plan as early as you can and take action (knowing you’re behind and taking action is better than not knowing until it’s too late!). If you need help, don’t be afraid to contact a financial advisor for tailored advice.
Contact Information:
Email: [email protected]
Phone: 6232511574
Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.
Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.
