What is the best age to retire? What are the important considerations that we need to keep in mind

A

ahlerka

New Member
I hear many people say that they postponed their retirement till later so they can save more money and enjoy comfortable retirement. By the time they retire, they are too old to enjoy their savings. On the other hand of you retire too early, you might end up with no money; the life expectancy is much longer now and we live longer than our granddads. What are the important considerations that we need to keep in mind when we decide on the age to retire?
 

For my wife and I, we had originally intended to retire when I turned 62, but after talking with our financial planner we decided to stop earlier. I just retired, a few months shy of my 61st birthday and my wife stopped last year at age 59. We have enough money stashed away, I will be getting a pension, and we'll both take social security at age 62. We'll be conservative with spending for now, but will have more flexibility in the years ahead. I think our biggest factors in deciding to retire were financial, followed by a desire to relax after many years of hard work and enjoy life while we can.
 
ahlerka said:
I hear many people say that they postponed their retirement till later so they can save more money and enjoy comfortable retirement. By the time they retire, they are too old to enjoy their savings. On the other hand of you retire too early, you might end up with no money; the life expectancy is much longer now and we live longer than our granddads. What are the important considerations that we need to keep in mind when we decide on the age to retire?
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The best age is As Soon As Possible...depending upon your financial position. This will vary for everyone, but if you can project your expenses fairly well, have a pension, and some good savings and investments, etc., the more years you can spend doing what you want, the better. The Most Important thing....IMO...is to be Debt Free. Having a mortgage, and car payments, credit card debt, etc., etc., is a real drag on retirement. The biggest Wild Card, if everything else falls into place, would be health problems....so make sure you budget for some good health insurance to fill in the gaps that Medicare has.
 
>What are the important considerations that we need to keep in mind when we decide on the age to retire?<

One of the most important things, imo, is to plan to be debt-free at least one year before your projected retirement age.
 
Ahlerka, Looking at other peoples comments and from my own experience, the best years to enjoy retirement are those first ten or so. I went out at 63.
I was just looking at a photo of my wife and kids taken on her 71st birthday. A classic photo of family enjoying a happy life. It must have been within a month of that that she started on dialysis. It took five years, but that was when life started to go down hill. At 83 now, I have lost my younger son and my wife within the past year and a half. Not looking for sympathy here. Just giving you my own experience. We had some great times in those early years. Take a look at the thread "Annie's Adventures". You do have to plan ahead financially, but you are not going to be able to cover all of the bases no matter how carefully you plan. We never bought the hype about working till you're 70 in order to increase your SS. I took it at 62!/2 while I was still working. Never regretted it. Don't wait if you can possibly afford it.

Yes. As others have said "debt free". Very important!
 
Debt free is good if you can..

Costs continue (health ins,other ins, and costs of living) to go up and savings really come into play..
 
I envy a bunch of you. My retirement plans are to work multiple jobs. Try not to become homeless or dogless n' work until I drop dead...happy senior years.
 
I think that Don M sums it up well - retire as soon as you can afford to. Although the UK provides a pretty poor state pension, we don't have to worry about medical insurance as it's free (but unless it's urgent, waiting times are long) I retired at 56, but I've just received my state pension at 65. This has helped but without my company pensions, life would be difficult.

Always allow a good chunk of money for the unexpected.
 
It's all a balancing act. I think you want to enjoy life, so don't wait too long. I had one parent killed in a car accident when she was my age, so I live with the thought I want to enjoy my life, but not be broke. Luckily, I have a pension from my job, so 60 was good for me. I still work part-time, and that helps (both financially and purpose-wise).
 
Being completely debt-free, while an admirable goal, is not always realistic. Having a small mortgage is not incompatible with retirement income for most people. In fact, some people refinance their homes after the mortgage has been paid off, to give them some immediate cash. Obviously, as with any other
stage of life, we have to be careful about the amount of debt we accrue.
 
I had planned on working until 65 or 66, but I met a man at 61 who was retired and ready to take off and see America. We were well compatible and I'm sure he would have (reluctantly) waited a few more years but I couldn't see any good reason to wait, so I finished off my obligations, sold my house and retired at 62, and off we went. I have no regrets. Between SS, a pension and savings, I'm doing fine.
 
I agree with Don M. ... retire as soon as you're able. If you're lucky enough to have a fulfilling job that you love, then by all means keep doing it. I think most people would rather be doing something else though. I also agree with Sunny ... debt isn't necessarily a bad thing, as long as your income is enough to handle it. I think you still need to keep planning though. Your savings need to grow fast enough so you don't run out of money. You need to account for the future expenses of healthcare and long-term care. Your children might need you to help them out at some point. Also, don't get scammed.
 
It is so hard to know. I continually worry about finances because I will not have a pension. Only social security. My main concern is having a safe and affordable home and being able to provide for my cats. And eat. :)
 
And see things change SIL working for big corporate medical. Freakin' head of the hospice...they basically dissolved her job description yup you need to retire in the next year.
 
Look, there is NO "best time" or magic formula for deciding when to retire. That is not the way to do good financial planning.

Everybody's situation is unique. Are you a couple? Single? Children? Elderly parents? Any siblings? What's your genetic medical history? What are your future employment probabilities? What percentage of your income do you put away in untouchable savings? Have you opened a Roth? What do you pay in fees on your investments? How old is your car, and how do you plan to finance buying a new or less-used one? Do you own a home? How much will your property taxes rise in 20 yrs? What kind of maintenance costs will you average over the lifetime of this specific ownership? What kind of lifestyle modifications have you made to improve your health in the last five years?

What do you envision retirement to be? Does your partner/spouse agree? What if you need to make serious lifestyle changes (of any kind, physical, financial, social/mental) - how will that affect your plans? What if your partner dies before you reach retirement age? What if one of you becomes disabled, how does that affect your finances? Are you carrying sufficient insurance in whatever areas you are at high risk? Have you done your legal documents? Are they up to date? Accessible to all executors/trustees/agents/heirs? If one of you dies is the other prepared for the decisions that must be made? Have you set up access to your passwords if somebody needs to take over in an emergency? Do your heirs know who your tax advisor and attorney are, and their contact info?

Looking for an answer of "oh, if you've saved xx amt of $$, then you can retire at age xx" is dangerous. Maybe you'll be lucky and everything will work out. Maybe stress-testing your plans against not just one or two bad things happening, but three or four, or five bad things happening in quick succession - won't be necessary after all.

However, since my DH and I retired early, at the end of 2009 as the markets were collapsing and hysteria reigned supreme, I can honestly say in our case, proper planning made the difference. We had started financial planning in our late 40's (and yes, we're sorry we didn't start sooner, LOL). Despite having made less money than most of our friends, we were THE ONLY ones who were able to take a planned early retirement and start doing the things we wanted.

Five years later we have not had to make any adjustments at all in our lifestyle, despite rising costs of travel, an unexpected but needed major home remodeling project, and a huge increase in our LTC-i premiums.

So.....look at how you live. Decide how you want to live in retirement. What will that cost you? How will you best pay for it? Where do you have to adjust expectations vs expense? Then, start working the "worst case" scenarios - thoroughly.

Remember, you can't remove all risk from your life, but you can mitigate it to an acceptable level. Figure out where your biggest risks are, that might keep you from succeeding, and work on a plan to lessen those risks; e.g., increase your chances of success.

Yup, it's work. If you're a couple it requires a lot of discussion (sometimes we got so irritated at one another, we had to stop for ten minutes and take some deep breaths). And then there's more work, to get your lives properly organized (those pesky legal issues) and keep it updated. But it's necessary, and the process of handling how you die/become ill or disabled, is just as important as part of the whole retirement discussion, as is 'what age is best'?
 
It depends upon every individual some people plan their retirement at the age of 45-50 and some around 60’s. But, it’s important to plan your retirement finances in early age because unplanned retirement generally means you need to regroup and make the best of your resources. You need to start saving and smart saving. One can start saving with few investment plans like bank Fix Deposit, Life Insurance, Public Provident Fund, Equity Mutual Funds etc. So, start your retirement planning now.
 
I agree with those previous posts that say you need to secure your future financially before leaving behind all sources of income. Over and above that, I think it is really important to have some idea of what you will do in retirement. Of course, that will change over time, but I found that I focused so much on the financial part of it that I really didn't think through what life would be like when there was nothing requiring me to be anywhere and do anything at a given time. And I know others who floundered around as well. It can take some time, and how one feels can't be known beforehand, but I think it is worth thinking about before taking the big step!
 
I always planned to retire before age 60 and did so at age 58. I waited until age 62 to take a company pension and Social Security. From age 58 till then I lived on investment income. I am quite comfortable now with The pension & Social Security and do not need at this point to use investments for anything. From age 58 until just two years ago I was able to take seven cruises on different size ships to many parts of the world, do considerable scuba diving, own a home in New Zealand, play lots of golf and live a very active life style.
It's all in the planning and I have no regrets other than wishing I was 20 years younger so I could enjoy it all over again. BTW I am using some of my investments to establish UTMA accounts for my four great grand children, soon to be five.
 
Retirement at the best possible age should not be left to chance. There is no exact age for retirement one can plan the retirement in early age according to your income and savings. But, it’s important that you start your retirement planning in young age so that you start savings accordingly. There are some important considerations while you decide for retirement. Before planning for retirement you need to calculate available retirement income that how much income you will get in retirement from all available resources like pensions, social security, retirement accounts etc. Check your current expenses, expenditure after retirement etc. If you want to calculate your retirement you can use Retirement Calculator which will provide you information that how much you save according to your income.
 
bodumene said:
I agree with those previous posts that say you need to secure your future financially before leaving behind all sources of income. Over and above that, I think it is really important to have some idea of what you will do in retirement. Of course, that will change over time, but I found that I focused so much on the financial part of it that I really didn't think through what life would be like when there was nothing requiring me to be anywhere and do anything at a given time. And I know others who floundered around as well. It can take some time, and how one feels can't be known beforehand, but I think it is worth thinking about before taking the big step!
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I agree. I floundered about a bit, too.. Not right away, because I was busy getting my hips replaced. But after I had recovered from that and was back on my feet (YAY!) I floundered because I hadn't taken into account how much of my feeling of "self" was wrapped up in what I "did," if that makes any sense.
 
Butterfly said:
I agree. I floundered about a bit, too.. Not right away, because I was busy getting my hips replaced. But after I had recovered from that and was back on my feet (YAY!) I floundered because I hadn't taken into account how much of my feeling of "self" was wrapped up in what I "did," if that makes any sense.
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Yes, it makes all kinds of sense. So much of what I thought I was about turned out to be not what I had become. I found that one's sense of who you are changes so much with where you are in your life. Though there is certainly a great deal of continuity, I finally realized I was not the same person as I was earlier in life and while I was "building". This realization actually became very liberating. I had read that one's strengths of the past can become obstacles in one's present life. For me, it was mostly the need to achieve, build, seek success and status. When I finally realized I did not need those things anymore, I became much more relaxed and could enjoy life more.
 
I retired one month before turning 51. I've always been a saver, then became an investor and I continue to do so even though I've been retired for 18 years. I, by no means, had anywhere near the amount the "experts" say one should have at retirement but I get a traditional pension which more than covers my expenses. I have owned a co-op apartment since age 23. Our housing expenses are about 36% of what the average apartment rents for in our city. I worked long enough to be able to keep my health insurance, an HMO and it's an excellent plan. It was free until I got on Medicare. I tried to get long term care insurance but due to pre-existing ailments, I was declined. I'm able to save/invest my SS benefits plus a little more. I am diligent about it mostly to be able to fund several months in a nursing home should it become necessary. My co-worker friends didn't think I could do it but I'm glad I retired when I did. I had health issues, my mom was aging and ailing and I was tired of working. I would advise anyone to try find a way to make it happen. Cut your expenses such that you're living on a budget similar to what your retirement income would be. I had them take out the highest amount possible for my deferred compensation plan two years prior to retiring. That was it wasn't a shock to receive a reduced amount of income.
 
Having a pension is a must

A pension is a must. Those who do not have one have a real problem. I solved the pension question years ago when I was in private industry, by switching to federal government employment. Much as that government is not exactly loved, their retirement system is one of the wonders of the world. Because of that system, I was able to retire early, never needing to wonder about how much of my savings I needed to withdraw in order to live. As far as I'm aware, I never needed to withdraw a penny of my savings or from the funds in my investment account. I've made many mistakes along the way to old age, but my decision to get back into federal employment was one of my best decisions.
 

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