Many people wonder when the best age to retire would be, but the truth is, there are A LOT of variables. There’s a lot more to retiring than what meets the eye, so let’s take a look at when the best age is for YOU to retire.
It used to be a common belief that the best age to retire is 65. That is no longer true. The perfect age to retire actually depends on what you want out of your retirement, such as Medicare coverage or social security benefits.
Retiring Based On Medicare
Many people choose to retire based on their Medicare eligibility. Medicare can be a very helpful and inexpensive form of insurance for retired individuals. Therefore, it makes sense that many people base their retirement on Medicare. The reason why many people choose to retire at age 65 is because that is when you are eligible for Medicare
If you are to retire before turning 65, insurance would be much more costly and you wouldn’t get the same coverage as you do with Medicare.
Social Security Benefits
Social Security is also another huge aspect of retirement that is more advantageous if you wait longer to retire. It is possible to receive Social Security when you turn 62, but in order to take full advantage of the benefits, it’s best to wait until you turn 65.
Taking Advantage of Social Security
Social Security is available to anyone that is 65 years of age that was born before 1960. If you were born after 1960, the age to receive these benefits is unfortunately 67. So that is another thing to keep in mind if you are trying to find the perfect age to retire.
Waiting to Collect Social Security
Another reason why waiting longer to collect social security is beneficial is because the longer you wait, the more money you will be able to collect. If you were to wait just 5 years longer you would notice a huge difference in the amount of money that you will be able to collect.
It’s Your Decision
While there are obviously huge benefits to retiring late, the decision as to when you retire is ultimately up to you. Some people retire before they even turn 60 and others wait until their 70’s. While there are more financial benefits to retiring later, it may be hard for some to wait that long.
Costs of Retiring
To understand how much it costs to retire, you first need to understand the fundamentals of retiring. Retiring basically means that you need to save up enough money throughout your life to support yourself when you retire.
>Benefits of Having A Retirement Account
Benefits Of A Retirement Account
1. You will have some piece of mind. Difficulties can come at the most inopportune moment, sometimes leaving a person wondering what they could and how can they get the money they need. A retirement account will reduce your stress level a lot.
2.Taking the time to plan ahead and know which expenses are a priority, your spending habits will be more efficient. Planning ahead also will influence your business expenses and career goals. Creating a plan will keep a “checks and balances” system with regards to what you spend money on and when. This way you are not spending unnecessary money.
3. You and your partner will be on the same page. You and your partner can do this together, creating a plan that suits both of you. That way when you do become seniors you will not have to worry about money as much.
4. You have enough to worry over when you become seniors. Creating a plan now will also prove to be beneficial with your taxes. You can opt for “tax diversification” making the most of your money as you move forward. That way you can get more money back which you can put into your account for later.
5. There is the cost-saving option that you can take advantage of now, while the two of you are still young and healthy. Opting into a health plan now, along with your retirement savings will prove to save you money later.
Health Plan Options
A lot of health plans allow you to “buy” now, at a lower price and maintain that fixed price as you become seniors. It is better than planning to wait and pay a higher price.
This cost-saving measure can also prove effective with home buying too. Chuck may decide to invest in a second home. His options may tell him to wait until he can afford it. That way Chuck is not spending money that he does not have.
Tips On Planning For Your Retirement Savings and More
Planning for the future requires planning in the here and now. Did you know that the money you have in the first 5-10 years during retirement is the most vulnerable? That means if you were to lose that money during that time then it will be harder to recoup later. You may not get every cent back if any at all.
You need to look for sources that prove to be a guaranteed money-maker. These options may yield less money, but it is a guaranteed outcome. For example, Chuck is a writer. Chuck has the chance to write about a lot of things. More importantly, Chuck needs to pay his bills. Chuck opts to choose the clients who will guarantee him a payday instead of writing for people who may or may not pay him for his work. Chuck needs to pay his bills and buy food. These necessities override his options of working with other clients.
Plan for Inflation
Plan for inflation because everything is increasing. What you pay for something now will increase significantly by the time you are seniors. That wy when you do get to be seniors you have not spent your savings on things you did not plan for. Planning begins with expecting the unexpected.
You may be used to spending on a whim, but you may not be able to afford that right now. You and your partner need to talk about your personal spending and what you spend together.
There may be some expenses you could afford to slow down. You also need to be honest about how much you can afford and why. That may mean cutting back on some of the luxury expenses. You may have to do it if it means having a safety net when you become seniors.
Plan for Healthcare
The goal is to stay healthy now but the unexpected happens. Medical expenses increase over time regardless of how well you take care of yourself. The last thing you want is for your healthcare expenses to wipe away your retirement savings in just one visit.
Plan to Live Rent Free
Try to pay your mortgage early. Mortgage payments later on in life can really take a hatchet to your savings. You will, essentially, be living in your home rent-free once you pay everything in full. Living in your home rent-free can cause a great reduction in stress because you do not have to worry about it.