Are You Retiring at the ‘Normal’ Age in 2025? 4 Steps To Take
Written by
Laura Beck
Edited by
Levi Leidy
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
The traditional retirement age in the U.S. is 65. But people are living longer now, and staying in their jobs longer, as well. That means that the average retirement age has gradually gone up over the years.
“What is the ‘right’ age to retire?” posed Rose Faye Niang, director of financial planning at Edelman Financial Engines. “Our recent research, Everyday Wealth in America, found near consensus that the ‘normal’ retirement age will be around age 67 or 68, and that roughly aligns with the full retirement age at which you can receive all your Social Security benefits.”
But your situation could be entirely different. So what’s considered “normal” might not be right for you. Deciding on when the right time is to retire is different for everybody.
The ‘Right’ Time To Retire Is Up To You
What matters most is not your age, but whether you have enough money saved. It might be possible to retire early if you’ve saved aggressively or invested wisely. Or you might need to work longer to make sure you have enough money to last the remainder of your lifetime.
“Ultimately, the ‘right’ time to retire is likely when you feel prepared enough, both financially and emotionally,” explained Niang.
Take a look at your retirement accounts. Make a budget for how much you’ll spend each month after you stop working. Will you still be paying off debt, like a mortgage or medical bills, when you retire?
It can also be tough to adjust to life without the routine your job gave you. So it’s important to be emotionally ready for all these changes.
Think About How Things Could Change After You Retire
Your financial situation can change significantly after you retire. You won’t be spending money on commuting or other work-related costs. But other expenses, such as your healthcare, will probably cost more the older you get.
With inflation, the cost of living goes up over time, too. So the money you’ve saved today may not stretch as far in the future.
“It gets even more complex when you start peeling back the layers of the retirement decision,” Niang said. “So much more needs to be considered including calculating expenses that might change in retirement (like taxes or healthcare cost), managing market volatility and inflation in retirement and developing a drawdown strategy so your savings will last you throughout retirement.”
If you’re living off your investments, then any change in the market could easily have a big effect on your retirement. Build a plan that accounts for all these possibilities. Try to have different sources of income, and have some emergency money saved for surprises.
Think About Retiring Gradually
Retirement doesn’t have to happen all at once. Sometimes people ease into it by gradually reducing their work hours or switching to a part-time job.
This can be a great option if you’re not ready to stop working completely. Instead of going from full-time work to no work at all, you can give yourself time to adjust emotionally and financially.
“Our findings also revealed that nearly a third of people say they will never be able to ‘fully’ retire,” Niang said. “That’s why some people opt for a phased retirement plan, in which they gradually step back from work. For many people, the workplace not only provides a source of income and health insurance but also a sense of fulfillment and community. So, this can be a good strategy to ease into retirement.”
You might be able to negotiate reduced hours or a consulting role. Freelancing can also be a way to keep earning money while you begin retiring. This way you can get the benefits of retirement without upending your whole life. You stay connected to your work community, and your mind stays active.
Talk To a Financial Planner
Deciding when to retire shouldn’t be done lightly. A good financial advisor can help a lot. They look at your specific situation. They can help you figure out when you’re actually ready to retire and, if you’re not, what adjustments you can make. They help you make a plan that works for you.
“No matter what age you will retire, it is crucial to plan well so you will have peace of mind entering retirement,” Niang added. “Talking to a financial planner can be one of the most important steps to help ensure you’re ready for retirement.”
Look for someone who specializes in retirement planning. Even if you think you’re on track, an expert opinion can give you peace of mind that you haven’t overlooked anything.
More From GOBankingRates
