What Age Can I Retire?

When can I retire? Maybe that’s a question you’ve been asking yourself since the day you started working. Or maybe you’re just beginning to contemplate your retirement. Either way, there are a few things you’ll want to factor in before deciding, “At What Age Can I Retire?” You can use a retirement calculator to help you decide this. But here is some information you might need to know first.

 

Decide What Kind of Retirement Lifestyle You Want       

Before you decide how much you’ll need to retire, you’ll need to decide the type of lifestyle you’re expecting to lead after retirement. For some people, finding a retirement community is important. Or investing in a new construction home in an over 55 community near you can be wise if you’re worried about flexible home layouts, finding amenities that support an active lifestyle, or looking for onsite activities that will help you stay social. New home builders can help with these sorts of things.

 

Buying a new home might also make sense if you’re trying to downgrade, save on taxes, move closer to family, or gain access to better healthcare facilities. But taking out a mortgage right before you retire is not for everyone. Here are a few things to consider before buying a new home for retirement.

 

There are other lifestyle decisions to make, also. Like if you want to travel or have hobbies that will require a specific budget. Retirement calculators typically estimate that you’ll want to have at least 80 percent of your income after retirement. This accounts for the savings and taxes that are usually pulled out of your paycheck.

 

Determine Your Monthly Budget & Savings

Once you’ve spent time thinking about the sort of things you’d like to do in retirement, determine some more clear boundaries around what your budget will be. Having a set retirement budget is important because unless you’re planning on working a part-time job after you retire, you won’t have much flexibility.

 

“Can I retire at 55 or 60?” This will depend on how much you have saved up and how much you want to have to spend every month. For example, if you want to have $3,000 to spend every month, then you’ll need to have at least $36,000 a year. But if you retire early, at 55, and live to the average age of about 79—that’s 24 years’ worth of salary that you’ll need to have saved up. Or a total of $864,000. But $3,000 dollars is a pretty modest budget for some and won’t come close to covering their monthly expenses.

 

What are some typical monthly expenses to factor in? Here are a few:

 

  • Mortgage/rent
  • Homeowners’ or renters’ insurance
  • Property tax
  • Auto insurance
  • Health insurance
  • Out-of-pocket medical costs.
  • Life insurance
  • Electricity and gas

 

You’ll want to add to these things like a traveling budget, money for holidays, and an emergency fund. This will give you a more accurate view of how much you need to retire and will better prepare you as you make a smart financial plan for retirement.

 

Using a Retirement Calculator

After thinking through some of these things, it’s smart to plug your information into a retirement calculator. A retirement calculator will factor in a few more details that will more accurately reflect the actual age at which you can afford to retire. This includes things like an inflation rate, salary increases, and the rate of return on your retirement account. While there are a lot of different retirement calculators out there, all of them tend to take these items into account, so, it's mostly important to find a retirement calculator from a source you trust and with a friendly layout.

 

At what age can you retire? This is really up to you. It’s possible to retire early, but that might mean making some sacrifices later on. Or you can invest for a few more years and enjoy a bigger budget and perhaps, retire happily in your “golden years”. Of course, some people take pleasure in working part-time after they retire. Doing this could be a good way to stay active, social, and have a little extra spending money. But, regardless of how you want to approach your retirement or pseudo retirement, just remember, there are plenty of ways for you to stay active and social and enjoy your 55+ lifestyle.

 

 

Contributed to The 55+ Society

Looking for more Society tips and learnings? Return Home here.

Published 11.18.21  

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