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When it comes to retirement, timing is everything.<\/p>\n
If you leave the workforce too early, you could increase the chances of outliving your savings. And if you retire too late, you may find yourself more exposed to age-related health risks with less time to enjoy your golden years.<\/p>\n<\/p>\n
According to the 2024 MassMutual Retirement Happiness Study, most American retirees and pre-retirees consider 63 to be the ideal age for retirement (1). With an average retirement age of 62 \u2014 which coincides with the earliest age for claiming Social Security benefits (2) \u2014 today\u2019s retirees are coming close to that mark, but future retirees may find it more difficult to retire in their early sixties.<\/p>\n
More than a third of pre-retirees (35%) report that their retirement savings are short of where they would need to be to comfortably retire at an ideal age, according to the MassMutual study. Meanwhile, 34% of pre-retirees believe there\u2019s a decent chance they could outlive their savings, with 22% of retirees sharing this concern.<\/p>\n
Put simply, retiring at 62 or 63 may be popular, but this may not be ideal when you consider all the factors that determine retirement success.<\/p>\n
If you\u2019re looking to maximize your chances of success in retirement, the age of Social Security eligibility is only the tip of the iceberg. Your financial sustainability, health care and longevity are also things that you should consider before deciding when to retire.<\/p>\n
For instance, your Social Security benefits could be roughly 30% lower if you retire at 62 rather than the full retirement age of 67 (depending on when you were born), according to the Social Security Administration. A smaller benefit payout could make a big difference to your retirement lifestyle.<\/p>\n
After all, Social Security has long been the safety net millions of retirees count on \u2014 with roughly 16.4 million people depending on the paycheck completely in 2022, according to data from the Pew Research Center (3).<\/p>\n
But concerns are mounting that the system\u2019s trust fund could start running dry as early as 2033.<\/p>\n
According to the latest Social Security Trustees report, the program will only be able to cover about 80% of scheduled benefits after 2034. And things might get worse sooner than expected.<\/p>\n
Karen Glenn, the Social Security Administration\u2019s chief actuary, recently warned that the old-age and survivors insurance (OASI) trust fund could be depleted by late 2032 due to the impact of the recently passed One Big Beautiful Bill Act (OBBBA) \u2014 even earlier than the previous projection of the first quarter of 2033 (4).<\/p>\n
Meanwhile, Medicare eligibility begins at 65 (5), which means you\u2019re likely to face higher private insurance costs if you decide to retire early.<\/p>\n
Another factor to consider is longevity. As of 2023, overall life expectancy in the U.S. is 78.4, according to the Centers for Disease Control and Prevention (6). However, a typical American’s life expectancy can stretch into the 80s and even 90s depending on their gender, date of birth and state, according to the Yale School of Public Health (7).<\/p>\n
In other words, if you retire at 62, you may need to ensure that your nest egg is big enough to keep you afloat for up to three decades.<\/p>\n
Trending: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B<\/a> \u2014 start using them today to get rich (and then stay rich)<\/strong><\/p>\n Before you start exploring new ways to boost your retirement savings, it\u2019s important to figure out where you stand. Knowing how much you\u2019ll actually need in retirement is half the battle. Even if you\u2019ve built a solid nest egg, it\u2019s smart to check whether your savings will stretch as far as you think.<\/p>\n A financial advisor can help crunch the numbers and build a plan that works.<\/p>\n But hiring an advisor can be a lifelong commitment, which might make or break your retirement. That\u2019s why finding reliable advisors is crucial.<\/p>\n That\u2019s where Advisor.com<\/a> can come in. The platform connects you with an expert near you for free.<\/p>\n Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.<\/p>\n Just enter a few details about your finances and goals, and Advisor.com\u2019s AI-powered matching tool will connect you with a qualified expert<\/a> best suited for your needs based on your unique financial goals and preferences.<\/p>\n Finding the right advisor isn\u2019t always easy \u2014 there\u2019s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation with no obligation to hire<\/a> to see if they\u2019re the right fit for you.<\/p>\n Once you\u2019ve got the right financial advisor in your corner, the next step is getting a clear picture of where your money\u2019s actually going. That starts with the basics \u2014 budgeting and tracking your spending.<\/p>\n You can track your spending and create a budget \u2014 all in one place \u2014 with Monarch Money<\/a>.<\/p>\n You can also create custom goals for your retirement<\/a>, personalized categories, and track your progress at all times on the all-in-one money management platform.<\/p>\n Monarch also offers a seven-day free trial to see if it\u2019s right for you. What\u2019s more, you can then get 50% off for your first year with the code WISE50<\/a>.<\/p>\n Once you\u2019ve nailed down your budget and know where your money\u2019s going, the next step is making sure you have a safety cushion in place.<\/p>\n Without a steady paycheck, setting up an emergency fund to meet any unforeseen expenses is crucial. Experts usually recommend keeping six to 12 months\u2019 worth of expenses as emergency savings. That way, you don\u2019t have to worry about going into debt in the event of a medical emergency or an expensive leaky roof repair.<\/p>\n You can make your idle cash work harder for you by opting for a high-yield, liquid account. That way, your emergency fund can generate some cash while still being easy to access when you need it.<\/p>\n For example, a Wealthfront Cash Account can provide a base variable APY of 3.50%, but new clients can get a 0.65% boost over their first three months for a total APY of 4.15%<\/a> on their emergency savings. That\u2019s over nine times the national deposit savings rate, according to the FDIC\u2019s October report.<\/p>\n With no minimum balances or account fees, as well as 24\/7 withdrawals and free domestic wire transfers, you can ensure your funds remain accessible at all times. Plus, balances of up to $8 million are insured<\/a> by the FDIC through program banks.<\/p>\n Wealthfront also offers joint cash accounts, which can help couples or families manage their finances all in one place.<\/p>\n When you consider all the data and eligibility requirements, it seems the ideal window for retirement is somewhere between 65 and 67 years old.<\/p>\n Retiring in this age range means you have a few extra years of income to add more savings to your nest egg. You\u2019re also eligible for Medicare \u2014 which reduces health care costs. Plus, delaying your retirement a few years gets you closer to full retirement age, when you can claim your full Social Security benefit.<\/p>\n To be clear, retirement planning is never a one-size-fits-all endeavor. It all depends on your situation. For instance, you may have much more in retirement savings than the typical American worker, or you could be facing health issues that compel you to leave the workforce early. In many cases, retiring in your early 60s can be justified.<\/p>\n However, if you\u2019re approaching your 60s with robust savings, relatively good health and some level of financial anxiety, delaying retirement by a few years might be a solid idea.<\/p>\n Join 200,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/strong><\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n MassMutual (1<\/a>); SSA (2<\/a>); Pew Research Center (3<\/a>); American Society of Pension Professionals & Actuaries (4<\/a>); Medicare.gov (5<\/a>); Centers for Disease Control and Prevention (6<\/a>); Yale School of Public Health (7<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"fizkes \/ Shutterstock Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content…\n","protected":false},"author":3,"featured_media":383255,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[64,7780,255,696,711,67,132,68],"class_list":{"0":"post-383254","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-dave-ramsey","10":"tag-personal-finance","11":"tag-retirement-savings","12":"tag-social-security","13":"tag-united-states","14":"tag-unitedstates","15":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115560162391661824","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/383254","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=383254"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/383254\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/383255"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=383254"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=383254"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=383254"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}