What is a Good Age to Retire?

You know probably one of the most asked questions we get here at Centennial Wealth Advisory when somebody sees us outside the office or maybe comes in for the first time they say, do I have enough to retire? What is the magic number? But maybe one of the other top 10 questions we get is what age should I retire? You know is there some magic age that somebody should retire? And the answer I often say is what age does your plan say you should retire? And if you don’t have a plan, you’re not going to know, right? So again, the importance of having a plan because that’s going to help drive that decison. But some interesting things or some ages to consider in retirement that might help you walk through this. So again, we need to go back to your financial plan, the detailed plan for the individual to really learn this question. But let’s start talking through this. One, the age of 55. In most circumstances if you’re fully retired from a company, you’re able to draw off your 401K or 403B balance at that point with no early distribution penalties. Potentially depending upon your tax situation, you’re still going to pay income tax on this, but you won’t have that early withdrawal penalty on those types of accounts. 59.5, that now after that we’re able to start drawing from your IRAs, Roth IRAs, such like that where we don’t have that early distribution penalty at that point as well. 62, many of you know that’s the start point you can start drawing traditional Social Security. While yes, you’re going to have a discount from your full retirement age, but that’s the point you’re eligible to start drawing from that. 65, you’re eligible for Medicare, right? So that’s an important thing because unless you’re fortunate enough to walk away from your employer with some sort of health care retirement health care benefits, you’re either going to be going on like the market place type insurance, pre-65 or at 65 or after you’re going to be able to be eligible for Medicare and look at all of the options that presents for you out there. I’m going to use the age 66-67, somewhere in between there is full retirement age for most people that are considering retirement at this point now. So that’s going to be different. That’s going to be on your Social Security statement. And you can see when your exact Social Security full retirement age is dependent upon on your birthday is how they figure that out. The age of 70, that’s the maximum age that you can defer that Social Security where it stops growing at that compounding affect. And then that’s where you have kind of that max benefit you can get from thereon. The other thing too, is look at your employer. Now there’s different ages sometimes for different employers depending upon if you have a Pension, retirement health care benefits and there’s like times of service and all these you know, you may know all of these situations already. But look into that and see if there’s different ages that you qualify for different benefits depending upon the years worked and how old you are. So again, that’s employer by employer circumstances there. So when is the perfect age to retire? It depends. I’m sure you may be sitting there and saying well, the younger the better and some people really enjoy their careers and they’re not too worried about that. But again, having that retirement plan that encompasses the income investments, taxes, estate, health care, that’s going to help drive that decision so you can feel confident in your plan so not only you can retire, but stay retired.