When Should You Retire?

Age can play a role in when a person retires, though it may not be the driving factor. One of the biggest concerns for those considering retirement is personal finances, including social security benefits and pensions. Additionally, a person’s health, well-being and access to medical benefits can inform retirement decisions. Ultimately, when you retire comes down to priorities and planning.

By Mariah Flores

It’s never too early to start planning for your career’s future — or your retirement.?

In the U.S., the common retirement age is 65, with men retiring at an average age of 64.6 years and women at age 62.3. You can begin receiving Social Security retirement benefits as early as 62, but “you are entitled to full benefits when you reach your full retirement age,” according to the Social Security Administration (SSA).

But is it ever too early for you to retire? Or possibly too late? Is retirement even an option for you? What is the best age to retire??

It all depends on your personal circumstances, from finances to career goals.?

Retirement isn’t always sunshine and beaches , like commercials portray … it’s whatever you decide you want it to be. That said, you should still prepare now so that you can live more comfortably during your retirement years.

Does Age Matter??

In short, no and yes … it’s complicated.?

“Age does not matter. And that's something I wish that more people knew, that age does not matter,” muses Katherine McCord , president and people operations consultant of Titan Management .

Maybe you want to travel the world or spend more time with your loved ones. Perhaps you’re content with your career accomplishments and are ready to enjoy the metaphorical fruits of your labor (or real ones if you’re into gardening).?

Whatever your reason for retiring, know that there’s no set age on when you should fulfill these dreams (or retire). Additionally, employers cannot push you into retirement due to your age , aside from a few exceptions.

So while age doesn’t necessarily matter, there are still several factors to take into consideration before making this big transition, including the fact that an early retirement costs money.

For example, if you begin receiving your social security benefits prior to your full retirement age , the benefits amount will be reduced by a slight amount. You can easily calculate your estimated social security retirement benefits using this SSA calculator .?

Nowadays, it may be smarter to delay when you’ll receive your benefits, due to high inflation . “The earlier you retire, the more you'll need,” writes Investopedia.?

Are You Financially Ready?

Finances are typically the biggest determinant of when you should/can retire.

Both McCord and Melissa Grabiner , a senior talent acquisition leader at CMC, a One Digital Company , agree that personal finances play a major role in when a person decides to retire .?

“[I] think the biggest question for everybody will be compensation and budget and finance … From my experience, most people are looking to retire when they are financially able to do so,” says Grabiner.

“Do they have IRAs , 401(k)s, or social security? I know that the earlier you retire, the less amount you get.”

Before you retire, take a moment to assess your overall financial situation, both in terms of stability and sustainability. Is it really conducive for you to retire early or should you wait a few more years? Everyone’s answer is different.?

“And those two things [financial stability and sustainability] go together when you're talking about retirement. You have to be able to sustain your financial situation,” says McCord.?

“What I tell people is, your retirement amount does not have to be with all the bells and whistles. It can be bills paid, a small amount of savings, some medical expenses, a little bit of spending,” she adds.

A simple budget is still useful in determining what time — rather than age — makes sense for you to retire at. “You can keep it very bare minimalist, but you have to be able to be financially stable and sustainable and whatever age that [retirement] can happen for you, do it.”

Also, be sure to think beyond social security benefits , focusing attention on pensions, health benefits (you qualify for Medicare at age 65), personal savings or, as Grabiner noted, 401(k)s and IRAs .?

There are some financial repercussions for withdrawing money from these “nest eggs” before a certain age, warns AARP.?

“If you retire before 59 1/2, you'll usually pay a 10 percent early withdrawal penalty from most tax-deferred accounts, such as traditional IRAs and 401(k) plans … And unless you have a Roth IRA, which is funded with after-tax contributions, you'll owe income taxes on the amount you withdraw from traditional accounts funded with pretax contributions.”

Take Health (Care) Into Account

“Health care is expensive,” writes AARP.?

As you get older, your medical expenses and needs may increase. Are you financially prepared to deal with this in retirement??

“I know some companies offer retiree medical benefits and some don't. And I think as people get older, [they’re] more being prone to perhaps having more medical expenses. And so it's very important that people have money socked away, even if they have health insurance, for those unforeseen accidents and any sort of medical issues that come up,” says Grabiner.

Medicare only begins when you turn 65, so you must have insurance and medical benefits lined up before retiring — no matter your age. Your employer may have options, but if they don’t, private insurance costs are no laughing matter.?

In the same vein, maybe your health is a driving factor behind your retirement.?

You’ve had a lot of health concerns and have a long bucket list. To leave the workforce sooner, you spend your money strategically.?

“Maybe push for [retirement] sooner and do things like instead of that fancy car, … buy a cash clunker, … [i]nstead of buying the $450,000 house I can afford, technically I'm going to buy a $250,000 house and put the rest of that money towards my retirement,” states McCord. “What are your priorities? Do you want to live the high fancy life now or do you want to retire earlier?”

All in all, retirement is all about priorities and planning, with some emphasis on age.?

You may even retire at any age and discover that you miss working .

Top Takeaways?

Age can play a role in when a person retires, though it may not be the driving factor.

• The average retirement in the U.S. is 65, some people retire early.
• You can receive social security benefits starting at age 62, but you don’t have full benefits until you hit your full retirement age.?
• Finances and savings, like IRAs and 401(k)s, in addition to social security, play a major role in when a person can retire and still live comfortably.
• You qualify for Medicare when you’re 65 years old, so if you retire early, you’ll have to find other insurance options.