What Age Should You Retire?

Trying to decide what age to retire? Your social security retirement age might not match up with your personal retirement plan, but that’s ok. Deciding when you’re ready to retire is a personal decision. But you’ll need to have a plan in place to make sure that you’re able to retire once you decide the time is right. Here are a few things you should consider before you decide what age to retire.

 

Social Security Retirement Age

The Social Security Act was signed in 1935, as part of President Roosevelt’s New Deal following World War I and the Great Depression. It was designed to help older workers secure a steady income after the age of 65. You’ve probably been paying towards social security for most of your working career—and if you’re close to 60, a part of you is probably eager to start banking on that money.

 

You’re allowed to start receiving your Social Security benefits at the age of 62. However, you won’t receive your full benefits at that time. That means you’ll get less every month for the rest of your retirement than you would if you waited until the age of 70, at which point you become eligible for full benefits. If you were born after 1960, the amount you would receive if you retired at 62 instead of 70 would be 30 percent less.

 

Now wait a minute, you say. According to the local diner, my senior discount age is only 60. And wouldn’t that be just the thing? Unfortunately, your senior discount age has nothing to do with your security retirement age although—you should definitely try to bank on that discount wherever you can. Because you might need a little free coffee to get you through working until you’re 70.

 

It’s also important to note that if you start taking benefits while you’re still working (and you can totally do this), there’s a limit to how much you’ll be able to make without it impacting your benefits. But here’s a bit of advice—if your day job is too demanding right now, you can always work a simpler job to hold you over until you turn 70. And you qualify for Medicare at the age of 65, so it doesn’t necessarily have to be a job with benefits.

 

The amount you receive in Social Security benefits is based on an average of your 35 highest-earning years. But if you aren’t earning a significant amount more now than you were before, it might be worth it to take a pay cut and an easier-to-work job.

 

Your Personal Retirement Age

You don’t necessarily have to work until you’re 70 in order to retire, of course. Especially if you’ve been saving up for retirement on your own. In fact, if you have a 401k you can start deducting money from it at the age of 55 without facing the typical 10 percent fee for withdrawing money too early. That means that you could choose to retire at 55 or 60 and depend on your 401k until you reach the age of 70, then start collecting your social security benefits.

 

There are other things to consider too, before you retire. Like how much you need to retire and still live comfortably. You’ll also want to consider your cost of senior living. How much you have saved, where you live, and what you plan to do during your retirement are all factors in this. Here are some key steps to planning a successful retirement. You should consider them before you commit to a retirement age.

 

 

Contributed to The 55+ Society 

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Published 12.30.21  

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