Many people often get excited whenever the word “retirement” is mentioned even if they love their jobs very much. If you ask them why, they can readily come up with so many reasons they must retire early. Well early retirement may be a cool thing but there are so many things you have to carefully consider before you take that leap.
Right Time to Retire
Retiring early has many interesting perks. Imagine that you no longer need to work but will have enough time to do those things you love. This idea is tempting isn’t it? Before you take the bold step to retire at any age, you need to cautiously consider the life changing processes involved in retirement.
The question we are hoping to answer in this article is the ideal retirement age. We are not talking about the official age but this has to do with personal preparedness for retirement. For some people who started early to plan and save for their retirement, 65 years may be their ideal retirement age. They have prepared everything they need for their retirement and are also qualified or entitled to some benefits due to their contributions.
What about those late boomers who started later than others? Retiring at 65 will not be ideal for them so let’s consider some of these factors that must determine the ideal retirement age for everyone. This is no more on age but on preparedness.
• Financial preparedness – It really depends on how prepared you are financially before you consider retirement. Many people who have passed the official retirement age had to push it further so that they can work longer and save more. This is not applicable to others who have saved enough for retirement. They can retire before the official age or they may patiently wait and retire later.
• Medicare eligibility status – we already know that Medicare coverage starts from the month of your 65th birthday. This fact plays a big role in many people’s decision for the ideal retirement age. There is also a penalty if you retire before the age of 65years. You are expected to pay higher premium this time if you are on private health insurance and sometimes, you may be denied the policy altogether.
• Increasing Social Security Age – You can sign up for your Social security as early as 62 but if you don’t wait till your full retirement age to start, your payments will reduce and this will last throughout your life time. On the other, you can increase you Social Security payments if you are able to delay it past your full retirement age. For example, if you can wait till 70 years before collecting, you will be having additional increase of 8% for every one year you delay. This factor alone is making people change their decisions on the ideal age for retirement. Well I personally think it is the smartest way to go.
• Emotional preparedness – one other factor that will determine your retirement age is how emotionally prepared you are to leave the corporate world and your job behind. To some people, they one thing that gives them joy is their jobs and colleagues. Packing up and leaving may seem easy till you leave and the reality sets in. You have to make sure that you can leave it all behind or else you will not be happy after retirement.
• Health issues – many may wish to extend their working years, save more and retire later. What about health challenges and unforeseen circumstances like accidents. To someone who is already incapacitated, the ideal age becomes immediately and not later even if he/she wished otherwise.
See beyond the free time and the assumed pleasures and then consider some important factors that will affect your life as a retiree. The bottom line is that the ideal retirement age depends on these factors and it is different for every individual.