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It’s usually 65.
That is the age most commonly associated with retirement for two reasons: People generally start to receive Social Security then, and it’s when most of our parents called it quits on their careers.
If that’s the case, then the numbers on a new Gallup poll are eye-opening. It states 76% of employees say they’ll keep working past retirement age, and 35% of those people will do so because they have to. That illustrates the dangers of not starting to save for retirement soon enough.
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When it comes down to it, there is no mandatory retirement age. Just like there is no one-size-fits-all career, there is no one standard retirement age or income. It all depends on factors such as the desire of the person to keep working (or not), the post-career lifestyle they want to have, their health, if the have any kids at home, if they plan to stay in the same house or downsize, and so on.
You have the most power in determining when you are ready to retire. If you take on too much debt and have to keep working to pay that debt, you are not ready—and that can happen at age 50 or age 80. Conversely, you could be 55 with no debt and $1 million in savings and be ready to retire because you have a budget and a savings-appropriate lifestyle in place.
The best financial spot to be in is one where you don’t need Social Security at all to fund your retirement. When that’s the case, you don’t need to worry about waiting until age 66 to get the full Social Security benefit ($2,533 in 2013) or trying to make it on the average monthly payout ($1,270).
Believe it or not, that level of savings is pretty easy to obtain. If you start at age 25 and save $300 a month to age 60 (that’s 35 years), you could potentially have $1.9 million in savings. That’s enough to provide most folks with a pretty nice lifestyle. At that point, Social Security is just gravy.
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The next chance you get, sit down with your spouse and develop a “golden years” budget. An experienced financial advisor with the heart of a teacher can help you determine the income level your investments will generate and whether it will support the lifestyle you’d like to have when you leave your career. Don’t use 65 as a benchmark; you are ready to retire when you can live comfortably on the income provided by your total retirement savings.
Waiting until later to start improving your money situation might mean saving more or working longer, which is still doable. But while the right retirement age can vary, the time to prepare for it is always the same: right now.
Whether it’s paying off debt, saving an emergency fund, or investing for the future, now is the time to act. By starting now, you maximize the preparation time you have left before retirement.
Whenever that may be.