As an aging adult, you may be wondering when you should retire. After all, you may have been working for several decades, and you may finally be ready to give up working and enjoy the rest of your life without having to worry about waking up early in the morning, sitting at a cubicle, or staying late nights in the office ever again. However, there are a few things that you should take into consideration before you officially make the decision to retire from your current position.
When Is The Right Age to Retire?
Some people prefer to retire early while other people are willing to wait. You may be at the age of 55 years old, and you may be considering retiring early for assorted reasons. However, it is important for you to ensure that you are financially capable of retiring at an earlier age. No one knows how long they will live, and considering you may live quite long, you will need to have enough income saved up to hold you over, especially until age 65, which is when you will be eligible for Medicare benefits.
You will need to calculate the amount of money that you already have saved up, along with the amount of money you typically spend on an annual basis. Of course, the amount of money you spend each year may only be an estimate, especially since household bills tend to fluctuate during certain months of the year. In order to afford the cost of living, you must have a good portion of income saved up for your retirement, which is something you may not be prepared for at 55 years old.
Another thing to take into consideration is social security. While retirees get to receive social security, it will not go into effect until you turn 62 years of age. Even if you are eligible to receive social security three years before the actual age of retirement, there may be a few restrictions that you would have to deal with when it comes to receiving money.
Retiring Too Early: Not Such a Good Idea
While it is a necessity for some, if you can hold back on retiring early, your best bet would be to simply wait until you turn 65 years old. If you retire early, you may still be short of income that you need to survive and afford the cost of living. In that case, although you are retired, you may end up having to find another source of income to help supplement your income.
If you retire too early, you will also be out of medical benefits, which are a necessity. Medicare will not be available to you until you are 65 years old, and you may not be able to afford the cost of health insurance all on your own.
If you can wait until you reach the full retirement age, you will be eligible for social security, Medicare, and many other benefits that would be limited if you retire early. In the meantime, starting up a 401k Plan and setting up a retirement savings account would be an ideal way to prepare for retirement in the future. As the cost of living continues to rise, it makes sense to have as much saved as possible.