If this sounds like you consider these questions below.
1. When can I retire?
The typical starting question asks, “When should I retire?” ⁉ Should you get out at 62 or wait until you are in your 70s? There are many factors that play into this decision.
- Having enough money to retire, including savings, retirement accounts, pensions, Social Security, etc.
- Needing to pay major bills, such as a mortgage or college tuition for your adult children.
- Still needing an income to support an elderly parent or sick family member.
- You enjoy what you do and still want to work.
It’s important to recognize that retiring is a major life decision. Not only will you have to rely on your savings for income but you will also have to find a way to occupy your time.
2. How will my social security be affected?
For many, Social Security will be an important source of income in retirement. Remember, when you choose to retire impacts the benefits you will receive (the earliest that you can retire and still receive a benefit is 62).
However, the benefits will be less if you decide to retire before 67, which is when you would receive your full benefits. If you wait until after age 70 retire you get more money per month.
Of course, Social Security benefits should not be the only factor you account for when choosing to retire.
3. Can I retire before age 62?
The answer depends on whether or not you have enough money saved. Remember that you can’t draw on Social Security for retirement until you are 62 years old.
Also, if you withdraw from your IRA or 401(k) early you will get a penalty. The early withdrawal penalty is usually about 10%.
4. What are the costs of retiring?
That depends on your own life situation. Some costs that you will experience in retirement include:
One cost that is sure to play a major factor is health care. The U.S. government estimates that people between ages 55 and 64 can expect to pay $4,958 a year in health care costs. For retirees between 65 and 74 it’s $5,956.
That’s a hefty chunk of change for anyone.
5. What do I do in retirement?
It’s common to feel anxiety about what you will do in retirement. Although many already have an idea—traveling, spending time with family, pursuing a hobby—for others the question can be overwhelming. Many of us build our identities around who we are in our job.
When our careers come to an end we can feel lost as to where our lives are headed. The solution is to fill the meaning derived from work with something new.
Maybe you always wanted to write a book, or get your license to be a scuba diving instructor. The world is full of limitless possibilities. Retirement isn’t an ending, but an opportunity to experience life’s possibilities.
6. What if I am ready to retire but still want to work?
If you’re at an age where retirement is ideal but you want to keep working then the solution may be to scale back the work you’re currently doing. Take on less clients or work fewer hours at the office. Some companies offer the opportunity to return to work as a contractor, so that you can receive your pension but continue the job you had been doing.
Or, maybe you’re ready for new work. Find something self-fulfilling to occupy your time, such as volunteering or maybe you even have the energy to start your own business. Work doesn’t have to end until you decide it does.
7. How about starting a second career?
If you’ve worked in the same industry your whole life why not start a second career? That way you can still earn income while also taking advantage of the flexibility of not working a 9-5 job.