What Is The Best Age To Retire?

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Dreaming of retiring early and enjoying a life of leisure? It can certainly be an enticing prospect. For most people, normal retirement age falls between 65 to 67, based on their birth year. However, early retirement could mean bidding farewell to the workforce as soon as 62, or even at an incredibly young age like 40, if you’re inspired by the FIRE movement — Financial Independence, Retire Early.

As Jerry Cahn, CEO and CLO of Age Brilliantly, told GOBankingRates, “Retirement isn’t about age, it’s about the lifestyle you want to lead as you journey through your potential 100-year life. The starting point for anyone to set a retirement age is to first ask: what do I want to do every day with my life for the remaining years?”

The main reason for retiring later rather than earlier is to maximize retirement benefits; withdrawing them at a later age means you can withdraw more than you would at an earlier retirement age. But what retirement age is right for you? Figuring out when to stop working requires considering a number of factors. Here’s what you should think about in order to best decide when to retire.

Are You Retirement Ready?

All the Factors You Need To Consider Before You Actually Retire

What will life hold for me at 65? Will I have a family? Any health concerns? Could I be burdened with debt?

Planning for retirement involves preparing for the uncertainties of the future. Though contemplating these questions might make you a bit anxious, they’re essential in determining the ideal retirement age. Life is unpredictable, and significant changes can occur between now and retirement, including shifts in the U.S. economy and climate.

Even individuals aiming for early retirement, say at 40, must stay vigilant about potential financial fluctuations that could either delay or expedite their retirement plans. To answer the crucial question of when to retire, consider the following factors.

Early Retirement

Imagine being free to embrace a completely different lifestyle, no longer bound by the demands of work. You could embark on thrilling adventures, start your dream business or dedicate your time to meaningful volunteer and charity work. The possibilities are boundless.

Are You Retirement Ready?

However, early retirement isn’t without its cons. One significant consideration is that your retirement savings must sustain you for a potentially extended period. If you retire at 40 and anticipate living until 90, you’ll need to amass enough funds to support yourself for a half-century!

Will Your Savings Last?

Obviously, your savings will play a huge role in whether you can fulfill your retirement goals. According to a recent online survey, commissioned by Clever Real Estate in February 2023, the average retiree only has $170,726 in retirement savings, which is just 31% of the recommended savings amount.

Perhaps this is why 48% of retirees believe they’ll outlive their savings.

When Will You Qualify for Social Security and Medicare?

Another aspect to ponder is the impact on Social Security and Medicare planning. Taking Social Security benefits as early as 62 results in reduced payouts, while Medicare eligibility only kicks in at age 65. This means factoring in health insurance and healthcare costs into your early retirement budget — and determining how to cover these expenses.

Traditional Retirement

Retiring at the normal age — typically between 65 and 67 for Social Security purposes — might be the way to go. This route offers several advantages worth considering.

Are You Retirement Ready?


Staying in the workforce longer allows you to contribute more to your 401(k) plan, and if your employer provides matching contributions, you stand to gain even more. You’ll also have additional time to generate income and contribute to a traditional or Roth IRA, complementing your workplace savings.

Retiring at the normal age ensures you won’t experience a reduction in Social Security benefits, providing a stable financial foundation. Additionally, remaining employed means you can retain your employer’s health insurance until you hit the age of 65, when Medicare becomes available.


The trade-off is that you may find yourself working longer than desired, delaying the pursuit of your dream retirement lifestyle. Unforeseen circumstances like health issues or your company downsizing could also force you into early retirement, disrupting your plans.

The Best Age to Retire: When You Can Collect 100% of Social Security Benefits

The best age to retire for most would be the age at which you can collect full Social Security benefits, which the Social Security Administration calls full retirement age. However, this Social Security benefits age isn’t a fixed number. The Social Security Administration lists full retirement age as between 66 and 67, depending on your birthdate.

Are You Retirement Ready?

You can begin collecting benefits at age 62, but doing so means receiving less in benefits than if you started collecting them at your full retirement age.

If You Were Born Between 1943 and 1954

The full Social Security retirement age for men and women born between 1943 and 1954 is 66. If you begin collecting at 62, your benefits will be reduced by 25%. If you hold out until you turn 65, you’ll get 93.3% of your benefits.

Spousal benefits are 50% if you wait until 66 to receive them, but if you start collecting benefits at 62, you’ll receive only 35% of those benefits.

If You Were Born Between 1955 and 1959

You must retire at 66 plus several months if you were born between 1955 and 1959 and want to get full benefits. Again, your exact birthdate determines how many additional months you’ll have to wait.

As for spousal benefits, if you wait until your full age, you can collect 50%. If you begin collecting at 65, you’ll receive 41.7% of the benefits, and if you begin collecting at 62, you’ll get 32.5%.

Delayed Retirement

Some individuals opt for delayed retirement. If you genuinely enjoy your job and are in good health, working past the normal retirement age might be appealing. Continuing to save and contribute to your retirement accounts can lead to a more substantial nest egg.

Are You Retirement Ready?

A significant benefit of delaying retirement is the potential increase in Social Security benefits. By waiting past the normal retirement age to claim benefits, you can boost the amount you receive, securing a more comfortable financial future.

Sometimes it’s worth holding off on retirement for the simple fact that you love your job. Although retirement can provide reprieve from a demanding work life, for some, their job is a source of happiness, contentedness or just soothing familiarity.

When Delayed Retirement Isn’t an Option

Delayed retirement only works if you remain healthy and able to work. One drawback is postponing your plans for travel, relocation or spending quality time with loved ones.

It’s crucial to balance the financial advantages with the personal sacrifices involved in delaying retirement.

Other Factors To Consider

There are a few more things you’ll need to keep in mind when deciding what age to retire.

Social Security

It’s not completely off the wall to think you might not be able to tap into your Social Security benefits once you retire. The Social Security Board of Trustees has said the trust funds that augment the system will run out of money by 2034, so you’d be forgiven for taking a cynical view on your future entitlements.

Are You Retirement Ready?

In 2034, the Social Security Administration will run out of the excess reserves it has to fully fund Americans in retirement. When that happens, there will only be enough money to fund 78% of retirees’ full benefits. To fix the funding issue, Congress has a few options, like cutting retirees’ benefits or increasing tax revenue to make up the shortfall.

You might want to plan for reduced benefits if you are planning to retire in 2034 or later.

Debt and Loans

Americans carried an average debt of $22,354 in 2022, down from an average of $23,325 in 2021, according to Northwestern Mutual’s “Planning & Progress Study 2022.”

Debt can severely impact your retirement plans, both because it can be a drain on your finances and because it can harm your credit. When planning for retirement, give yourself limitations on what you need versus what you want. Also, plan on taking steps to eliminate any debt you accrue before retirement. For older folks, that often means mortgage debt.

Taking Care of Children

Family is a lifetime commitment that doesn’t stop once you retire. The average cost of raising a child currently stands at approximately $310,605, according to a 2022 report by the Department of Agriculture. If you have offspring, you need to factor that into how that’ll affect your savings. Your retirement benefits might end up supporting more than just you.

There’s even conversation that the long-term advantages of saving for your own retirement outweigh saving for your child’s education.

Your Health

Health might well be the biggest factor in determining when you retire. Your health can deteriorate to such a point you need to retire earlier, or you might continue working a few more years just to take advantage of your employer’s health plan. However, there could also be an association between retiring early and living longer.

To be sure, retiring early doesn’t magically revitalize you — though what you do in retirement, when you’re afforded more free time and freedom, might help you add some years. You’ll have more time for exercise, to experiment with healthier diets, to get more sleep, etc.

And also remember, another way to save for retirement and to safeguard your health is to contribute to a health savings account. An HSA comes with some tax advantages, such as tax-deductible contributions and tax-free interest, which would come in handy for use during a period in your life when medical costs generally increase.

Healthcare costs generally rise with age, which means you might want to consider healthy living as part of your retirement plan. Healthcare costs themselves are rising. Employer-sponsored premiums for single coverage jumped to $7,911 in 2022 — an increase of 2% from the year before. Because this trend shows no sign of abating, you’ll want to factor it into your retirement plans.

Life Expectancy

It’s not the most fun thing to consider, but how long you have left to live is also important to factor into your retirement plans. The current life expectancy for the average American is around 77, with the main factors driving down life expectancy being heart disease and cancer. Your relationship to retirement will change depending on how long you think you’ll live for.

Your Retirement Accounts and Withdrawal Rules

Planning for retirement involves building up your retirement account, the most common types being individual retirement accounts and 401(k)s. Most retirement accounts carry specific rules involving contribution limits and rules on withdrawals.

For example, although both regular IRAs and Roth IRAs have the same contribution limits — $6,500 per year in 2023, or $7,500 if you’re over age 50 — only a regular IRA contribution is tax-deductible. On the other hand, a Roth IRA is not taxed as income once you begin withdrawing from it, unlike a regular IRA. Furthermore, Roth IRAs don’t require minimum distributions, which themselves carry a tax penalty if not taken.

A 401(k) is an employer-sponsored retirement plan with a much higher contribution limit: $22,500, including the total of all employer contributions and employee elective deferrals. However, these are also taxable as income upon withdrawal.


Ultimately, whether you choose early retirement, opt for the traditional path or decide to work longer, it’s essential to carefully weigh the pros and cons to ensure your financial stability and the fulfillment of your dreams.

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Sean Dennison and Laura Beck contributed to the reporting for this article.


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