The Ideal Retirement Age

ideal retirement

At what age do you plan to retire?  Before 60?  At 65?  When you are 70 or older?  Never?  Retirement at age 65 is no longer the goal for most working Americans. The percentage of workers who expect to retire after age 65 has increased --- from 11% in 1991, to 19% in 2000, 24% in 2005, 33% in 2010, to 36% currently according to the recently completed 2015 Retirement Confidence Survey (RCS).

However, while the age at which workers expect to retire is growing, few retirees have been able to delay retirement past age 65.  As we all know, things do not always work out as planned.  The 2015 RCS noted that half of retirees reported leaving the workforce earlier than planned.  While some of those (31%) did so because they are able to afford an early retirement, many cited hardships including health problems or disability (60%), company downsizing or closure (27%), caring for a spouse or other family member (22%), and changes in the skills required for their job (10%).  

The financial consequences of an unplanned or unexpected retirement can be burdensome.  Retirees who retire earlier than planned are more likely to say they are not confident about having enough money for a comfortable retirement or about paying for basic expenses, medical expenses, and long-term care expenses.

When you’re inputting an expected retirement age into a planning calculator, err on the earlier side to be realistic.  Know that you might be caring for aging parents, paying for your child’s college education, or looking at an early retirement that’s not of your own choosing.
People who are upbeat about their retirement preparations tend to engage in specific behaviors that are making them better prepared. Here’s how people who feel confident about their retirement finances are getting ready for retirement.

  1. Have a savings plan. People who have a systematic savings and investment plan feel better prepared for retirement than those who don’t.
  2. Get out of debt. Making payments on past debt can make it especially difficult to prepare for retirement.
  3. Eliminate unnecessary purchases.
  4. Calculate how much you will need for retirement.  Workers who have made the calculation are more than twice as likely to report feeling very confident about their retirement prospects as those who haven’t done the math.
  5. Take stock of your retirement income sources. It’s important to know from where your retirement income is going to come.

Your Equity Concepts Wealth Manager can help you plan for the future. How much to save, what asset allocation mix is right for you, when to start taking money out and how much you can safely withdraw are just some of the items your wealth manager is able to address with you. Even if you can do these calculations on your own, a wealth manager can push you to get them accomplished earlier and double check your assumptions.  If you, or anyone you know, wants to discuss this important topic in more detail, please let us know.
 
Kenny Elkins – 800-936-6166 or kenny@equity-concepts.com