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  • Writer's pictureMaureen Decker

When Should You Retire?

Updated: May 9, 2023

Deciding when it is best to retire can feel like a daunting and overwhelming decision. The answer depends on your needs and circumstances, including how extensively you have planned for retirement, how much you have saved, your health and whether you enjoy your job. Here are some factors to consider when deciding whether to retire at 55, 62, or 70.

Retiring at 55: There are several advantages to an early retirement at age 55. Retirees will be relieved of the daily stresses of working life and will have the opportunity to pursue their hobbies, such as traveling, relaxing, or spending time outdoors. This can be an incredible opportunity for those who can afford it; however, it is important to note that many workers are not financially secure enough to retire at 55. Individuals who are burnt-out and are looking for a change may be tempted to throw the towel in early and begin their retirement, even if they are not financially prepared to do so. If you plan to retire at 55, you need to have enough money saved to sustain you for decades. This is a disadvantage of an early retirement; you need to be prepared to ensure that you don’t outlive your savings. Individuals who have fully planned out their spending and have determined they have enough money to last the full length of their retirement should feel comfortable retiring.

Retiring at 62: Retiring in your early 60s is ideal for many people. You have allowed your savings to accumulate further and have received a few years of additional salary. In fact, the average retirement age in the U.S. is 63. There are downsides to retiring at 62, however; even though individuals become eligible to claim social security benefits at 62, they cannot claim the full amount until they reach their Full Retirement Age, which is 66 or 67 for most people. Workers who want to retire at 62 need to be prepared to take either a reduced social security check, or to not claim their social security until they reach their full retirement age. These workers also need to have funds prepared to cover the cost of healthcare. Individuals are not eligible for Medicare until they reach age 65, and many people will lose their health benefits once they resign from their jobs.

Retiring at 70: Some workers will decide it is in their best interest to retire late, such as at age 70. Individuals may feel that this is their best option if they love what they do and are in good enough health to continue working. Individuals who retire at 70 will have a few extra years to bolster their savings accounts and earn additional income. Individuals who retire at 70 can also claim their full social security benefit, as well as Medicare benefits (if they are enrolled in the program).

An important step you can take aiming to ensure a financially independent retirement is to plan. Individuals need to decide what they want their lifestyle to look like, how much they can afford to spend on a monthly basis, and how much their retirement will cost in full. Once these factors are determined, individuals can begin making a detailed, actionable plan of when to retire.


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