A Good Age For Retirement
As retirement planners, we get asked this question a lot, and our answer consistently is, “it depends.” While the average retirement age for men was 65 and 62 for women in 2021, there is no rule of thumb you can rely on when selecting the best age to retire. This is because everyone has a different financial situation and would each like to accomplish something different in retirement. Some people would like to spend retirement traveling the world, while others may want to stay closer to home and enjoy a life of leisure, spend time with family members, or spend their time volunteering for local charities. Whatever your choice, the retirement price tag will vary among individuals. For example, world travelers tend to spend more in retirement than those who stay closer to home.
Many people pick a retirement age based on something they read in a newspaper or choose an age at which their parents, friends, or co-workers have retired. Some put more thought into their annual vacation plans than they do about planning their retirement, which could last 30 years or more! Therefore, the decision of when to retire should not be taken lightly. Many other factors than your age should contribute to your decision, including (but not limited to) the amount of your retirement savings, retirement lifestyle, location, and health.
Average Retirement Age
The average Social Security retirement benefit for those aged 65 is roughly $2,484 per month in 2022. This monthly income is not enough for many people to cover their living expenses. Therefore, to live your desired retirement lifestyle, you will need enough savings to not only help supplement your Social Security income and keep pace with inflation. While the amount of supplemental income will vary among retirees, it is directly related to their lifestyle.
Therefore, when considering your retirement age, it is equally important to ask yourself, “what is my desired retirement lifestyle? Will I downsize and move to an area with a lower (or perhaps a higher) cost of living? Would I like to travel in retirement or stay close to home and enjoy a life of leisure? How is my health? What if I develop a chronic or debilitating health issue and need to retire early; will I have enough savings?” The answers to these questions will help determine the best retirement age for you.
Instead of randomly picking a retirement age, it is essential to decide your desired retirement lifestyle. Understanding your retirement objectives will allow you to make a more informed decision about the best retirement age and will help put you on the path to a secure retirement.