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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
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
In fact, Generation X, who are between the ages of 45 and 60 today, are generally unprepared for retirement (3). A report from the Retirement Income Institute\u2019s Alliance for Lifetime Income (ALI) showed that Gen X will be \u201centering retirement less secure than any generation before them.\u201d Women in this age group have average retirement savings of $6,000 and men have $13,000. Moreover, only 14% of this generation have access to traditional pensions.<\/p>\n
According to the MassMutual survey, 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. Meanwhile, 34% of pre-retirees believe there\u2019s a decent chance they could outlive their savings, with 22% of retirees sharing this concern. To put this in perspective, a Northwestern Mutual study found that the average American thinks they\u2019ll need $1.26 million to comfortably enter their golden years (4).<\/p>\n
Put simply, retiring at 62 or 63 might 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 should be considered 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. The AARP reports that around 12% of men and 15% of women are solely dependent on their monthly check for retirement income (5).<\/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 (6).<\/p>\n
Meanwhile, Medicare eligibility begins at 65 (7), 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 (8). 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 (9).<\/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
Read More: Approaching retirement with no savings? Don\u2019t panic, you’re not alone. Here are 6 easy ways you can catch up (and fast)<\/a><\/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 could make or break your retirement. That\u2019s why finding reliable advisors is crucial. It can also be a serious boost to building confidence in your retirement. The ALI report found that only 41% of Gen Xers believe their retirement savings will last through their golden years. Among those working with an Advisor, that number jumps to 71%.<\/p>\n That\u2019s where Advisor.com<\/a> can come in. The platform connects you with up to three Advisors 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 yourself, like your ZIP code, plus some information about your financial 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 A quick daily check-in of your accounts can show you exactly where your money is going.<\/p>\n An app like Rocket Money<\/a> can easily flag recurring subscriptions, upcoming bills and unusual charges by pulling in transactions from all your linked accounts.<\/p>\n This can help you cut unnecessary costs, and then you can manually redirect savings straight into your retirement fund. No spreadsheets, no guesswork, no stress. Small habits like this can make a big difference over time.<\/p>\n Rocket Money\u2019s intuitive app<\/a> offers a variety of free and premium tools. Free features include subscription tracking, bill reminders and budgeting basics, while premium features \u2014 like automated savings, net worth tracking, customizable dashboards, and more \u2014 make it easier to stay on top of your retirement contributions and overall financial goals.<\/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 3.25%, but new clients can get a 0.65% boost over their first three months for a total APY of 3.90%<\/a> on their emergency savings. That\u2019s ten times the national deposit savings rate, according to the FDIC\u2019s January 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, 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 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>); Retirement Income Institute\u2019s Alliance for Lifetime Income (3<\/a>); Northwestern Mutual (4<\/a>); AARP (5<\/a>); American Society of Pension Professionals & Actuaries (6<\/a>); Medicare.gov (7<\/a>); Centers for Disease Control and Prevention (8<\/a>); Yale School of Public Health (9<\/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":"Rawpixel \/ Envato Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content…\n","protected":false},"author":2,"featured_media":437135,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,1168,147,530,1666,19526,733],"class_list":["post-437134","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-jeff-bezos","tag-personal-finance","tag-personalfinance","tag-retirement","tag-retirement-income","tag-social-security"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/437134","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=437134"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/437134\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/437135"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=437134"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=437134"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=437134"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}