8/13/2013 3:30 PM ET|
What's the ideal retirement age?
Factors such as the need to work longer and Medicare eligibility are causing workers to rethink when they’re going to retire. Age 65 is no longer when most people expect to hang it up.
Retirement at age 65 is no longer the goal for most working Americans. In 2010, for the first time, more Americans said they planned to retire after age 65 than before it, and since then the gap has widened, according to a recent Gallup survey of more than 2,000 U.S. adults, including 636 retirees. More than a third (37% ) of workers say they expect to retire after 65, up significantly from 14% in 1995.
People who are closer to age 65 generally project later retirement ages than younger workers. More than half of workers ages 58 to 64 plan to retire after age 65, compared with 36% of people in their early 50s, 38% of 30- and 40-somethings and just over a quarter (26% ) of people under age 30. "People who are very near retirement age in their 50s and 60s are looking at their Social Security benefits, 401k balance, their cost of living, medical costs and food costs and have a better sense of what things might be like when they actually retire," says Jeffrey Jones, managing editor of Gallup Poll. "They are more aware that early retirement might not be as much of a realistic option for people today as it was 30 or 40 years ago."
Individuals are pushing back their retirement age both because they need more time to save and because they enjoy many aspects of their jobs. Three-quarters (76%) of employees say they will continue working past retirement age, with 40% working because they want to and 35% because they will have to, Gallup found. Part-time work in retirement (61%) is greatly preferred to a full-time job (15%). But only 19% of those surveyed plan to completely stop working at retirement age by choice.
Individuals with high salaries are the most likely to want to stick with their jobs. Nearly half (49%) of those earning $75,000 or more say they plan to work past retirement age because they want to, compared to about a third of people earning less money. In contrast, people earning between $30,000 and $74,999 (39%) and especially employees earning less than $30,000 (43%) are more likely to continue working in retirement because it's necessary to maintain their standard of living.
Qualifying for Medicare plays a big role in many people's retirement decisions. Medicare coverage can start as early as the month you turn age 65. People who retire before age 65 face the risk of being forced to pay high premiums for private health insurance or COBRA coverage, or even being denied health insurance altogether. "One of the greatest retirement costs people face, even if they are healthy, is medical care and health insurance," says Brent Neiser, a certified financial planner and a senior director at the National Endowment for Financial Education in Denver. "You probably do not want to get out of a reasonable health insurance situation before age 65 because if you have a gap that needs to be filled, it could be very expensive."
Higher Social Security retirement age
The increasing Social Security retirement age may also be inspiring people to work longer. While you can sign up for Social Security as early as age 62, your payments will be reduced unless you wait until your full retirement age to start payments. The full retirement age is 65 for everyone born in 1937 and earlier, but has since increased to 66 for most baby boomers and will further climb to 67 for everyone born in 1960 or later. "You are not tapping into the full potential of Social Security if you elect to claim Social Security before age 66 because it is significantly discounted. Some people might call it a haircut," Neiser says. "That smaller amount adds up to thousands and thousands of dollars less throughout your lifetime."
Social Security monthly payments will further increase if you delay your start date past full retirement age, up until age 70. "I think people tend to associate when they begin taking Social Security with when they retire, and I think it's really important to decouple those two events," says Tim Kober, a certified financial planner for Cedar Financial Advisors in Beaverton, Ore. "For most families and households, delaying Social Security is the single smartest and most financially savvy decision that you can make because for every year that you delay taking Social Security, your benefit increases 8%."
However, while the age workers expect to retire is growing, few retirees have been able to delay retirement past age 65. Just 17% of the retirees in the Gallup survey left the workforce after age 65. Currently, the average retirement age is 61, up from 57 in 1991. The most popular ages to retire are between 60 and 64 (36% ). And 31% of seniors entered retirement before age 60.
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I retired at 57,the last 6 years of my life have been the best. I loved my job, but love retirement more!
We have just moved to Florida to the largest retirement community in the country. Wished we had come here 6 years ago - but excited to be here now.
Waite till 70 - NO.
Waite till 65 - NO
Enjoy yourself while you still have good health!
I was a truck driver making $85,000 a year gross. While on vacation when I was 60, I got an eye injury that made me ineligible to drive. It took most of my savings to live for the next year, plus medical treatment, and about the time all my savings were gone, my eye recovered, and I passed the medical exam, so I could drive commercially again. I drove again for about a year, when I had a fall and hurt my hip. I couldn't climb in or out of the truck anymore without pain. My company put me on part time, doing road tests and new driver training. It still hurt to climb, but not every day, several times a day.
I managed to survive until I was 62, and retired. I hated to take early retirement, but really had no choice? Survival is a big priority?
Although I don't have much money though, I find that my life is a lot better. I ride a mountain bike, got a rescue cat, and put in a small garden and raise some of my favorite vegetables that cost too much at the store. My cat 'talks' to me, purrs and cuddles. He keeps me alive. He helps me garden by chasing out the moths... I quit driving, since registration/insurance cost me over a dollar a mile, and the supermarket is only a 1/3 mile away. I've been walking so much that my boots that I bought 6 months ago are already worn out. My hip still hurts, but walking seems to help.
I'm 66, and have lost 50 pounds in the last 2 years, jeans went from a 40 to a 36.
I didn't want to retire, but guess what? I'm not living in luxury, but happier than I've ever been!
There really is no definitive answer on what is the ideal retirement age because that decision depends on the individual. Some people are forced to take early retirement because of health reasons or losing their jobs later in life and not being able to find work. Other people need to retire later because their finances are not adequate.
I believe the people who do have the ideal retirement are those who have taken the time to plan for it. They may retire early because the saved and invested well or they may retire later because they enjoy their jobs and want to continue working.
My younger brother and I have been talking about our retirements for years. He is in the camp that would like to retire early at 62 while I plan on working until I am 70. My brother is married, has four grown children, and one grandchild. I am single and childless. We both have been planning for our retirements for years and are doing well with our investments.
My brother is tired of working and wants to spend more time with his friends and family and that is a big part of why he would like to retire at sixty two. I enjoy what I am doing and would like to retire later. When I do retire I plan on living very comfortably, would like to travel, spend time with my family and friends, and help out my loved ones. On both sides of our family we are blessed with long life.
I have always been a good saver but I did not become a good investor until I was in my thirties. I am in my late fifties and I am on track to attain all of my investment and retirement goals. I monitor my investments and I tweak my plans as needed. I have always kept a rainy day fund for the unexpected and each passing year brings me closer to my retirement and me reaching my goals.
I realize things could change and I may like to retire earlier or be forced to retire. I have been disciplined with my financial and retirement plans. I have no debt, live within my means, and have planned for the unexpected. I have peace of mind knowing I have financial and retirement plan.
Every individuals needs are different and each person’s ideal retirement age will coincide with those needs. The easiest way to achieve your perfect retirement age is to have a financial and retirement plan, live within your means, stay out of debt and plan for the unexpected. The earlier you start your plan the easier it will be when you get older and closer to retirement.
Here is what I did....
Waited until the house is free and clear.
My retirement income was able to replace going to work. No more, no less.
The age? Don't want to say. It'll just make you hate me.
Good luck, campers.
Interesting statement - "I think people tend to associate when they begin taking Social Security with when they retire, and I think it's really important to decouple those two events,"...
Although there is plenty of talk about delaying taking Social Security, I wouldn't resort to eating cat food or do something as drastic as take a reverse mortgage in an effort to delay and thereby boost a future Social Security payment by 8%. If it is still around (I make every effort to plan without including Social Security) I'll most certainly take it when I determine I need to take it - THAT should be the overriding factor and each person's situation is going to be different. Chances are, the cost of medical coverage will weigh heavier in the decision to retire than will the decision whether or not to draw Social Security. Of course, I am eyeing early, we'll just have to see HOW early that will be.
I plan to retire in 3,three years longer than my original plan.58 is a good is a good age for me .I will have 33 yrs in a state pension and will not have to look at social security for a while.
As long as a person manages to keep free of un-necessary debt it is possible to retire at an age where you can go out and enjoy yourself and that beautiful woman that I have been married to for 38 yrs.It is OUR time now.
Plan, plan, plan, plan, plan, plan, plan.
And when you done planning.......plan again.
It can be done.
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