Perfect Retirement Age: Things To Consider

What is the perfect age to retire? I personally feel that depends on several factors. Some individuals love their job and have no desire to hang things up early. Others, meanwhile, absolutely hate their job and are counting down the days until the chains of servitude break. Fortunately, I am not in this group. I love what I do. However, at some point I will want to retire. Whatever age you choose, I think you need to clarify a few ground rules. When picking that ideal age an individual should determine what they plan on doing to fill the time, crunch the numbers to make sure you can afford to retire and consider your future health concerns.

Make sure you plan for after you retire. Working 40 plus hours a week takes up a lot of your time. When you retire, it is important to have a game plan on  what you are  going to do to fill the time? Yes, you might be happy in the beginning sleeping til noon, but after a few months the boredom will inevitably set in.

I personally plan on golfing two or three days a week and working out at the gym nearly everyday. I am even willing to be my wife’s personal male gigolo. I know what you are thinking and yes I know that I am a very selfless individual only looking out for my wife’s well-being.

In all seriousness, I think the most important consideration is making sure you remain physically and mentally sharp. I think a great way to achieve this balance might be volunteering to work with a non-profit group or just simply find a part-time job to supplement your income. Walmart greeter or Chippendale dancer are merely a few suggestions. My bum knee prevents me from harnessing my inner Magic Mike. In the end, doing nothing is not the best option.

You need to crunch the numbers. It sounds like a no-brainier, but if you want to stay retired, a person has to make sure the nest egg is big enough to last. How much money you have is likely to determine the age you retire. Most financial experts argue you need at least 25x  your annual expenses.

What is your number you need to retire? That depends on the lifestyle you want to live during those golden years. Do you just want to survive or do you actually want to have a life when you retire? For example, I know that I will end up retiring before my wife, so I need to make sure that I have enough passive income that will help offset my income. If I can generate $20,000 to $30,000 in passive income with my wife’s salary we can easily save during my retirement. Yes, I can actually continue saving money while I am retired.

Most financial experts will tell you that you need around 80% of your current income to maintain a similar standard of living. You should also only withdraw about 4% of your nest egg each year. Once again, I think it all depends on your lifestyle and where you live. If you live in an area of the country where the cost of living is higher  you will obviously need to save more to maintain that lifestyle. You need to consider a variety of factors when crunching the numbers.

Making sure you have adequate healthcare insurance during retirement is also crucial. It seems that most people have a hard time retiring early because of this issue. I know several individuals that are forced to stay in the workforce because they need to maintain healthcare insurance.

The Affordable Healthcare Act was intended to help citizens afford insurance, but the reality did not match the campaign promises. I think the Obama Administration tried to help, but after the special interest and insurance companies got done with the legislation, it was so watered down that it was rendered feckless.

I really do not know what the answer is when trying to prepare for this. I am lucky in this regard because I am Native American and I get free healthcare services through the tribe. It is not great insurance, but it is there. That is one of the main reasons I will be able to retire before my wife. I have read numerous articles about the cost of insurance and most tend to argue you will need about $250,000 to help you offset healthcare expenses. Obviously, some people are healthier than others. Prescription drugs seem to be a major expense that is only going higher. The number I mentioned might be high or too low. Either way, you will not be eligible for Medicare until you are 65 years old.

In the end, only you will be able to decide what the ideal age is for you to retire. I am hoping I can retire in my late 40’s or early 50’s. I feel that I will need to save between $750,000 to $1,000,000 dollars to get there. Everyone’s situation is different, but I think it is important to at least be thinking about these issues now. So, the questions I have for you is what is your perfect/realistic age to retire and how much money will you need? Food for thought.

 

4 thoughts on “Perfect Retirement Age: Things To Consider”

  1. I decided to retire at 59 after a career with the same company for almost 40 years. Like you I enjoyed my job for almost all of those years but the last two years stopped being fun. I hung around for those unfun years mostly because I was in a high corporate role and made a lot in stock deals and bonuses. But when I realized I had far more money than I would ever need I walked away. I agree with what you said in your post. Although money and health insurance are insignificant issues for my retired wife and me I realized that my hobbies of lots of tennis and running would not be enough so I developed a half dozen volunteer jobs, actually more like ten, that I do because they help others. But even at that I knew I needed to keep working some so I have five paying side gigs that occupy about 16 t0 20 flexible hours a week and generate our entire cost of living. I don’t need the money but I enjoy the activity and to be honest I like earning money and not touching my investments. We are all different but I advise your readers to take your advice and to consider some work during retirement.

    1. It seems like you have a great plan in place. I am glad that you do not have to touch your investments right now. Volunteering is a great way to help others and stay busy. I am not good at tennis, but I do enjoy that as well. Thanks for the comment and I look forward to hearing more from you.

  2. Great post, Eddie. I know my mom worked until she was about 78 and I really don’t want to do that. But she never had a retirement plan anywhere she worked, and she never made even $10/hour so that made retirement pretty difficult. Her husband (they got married two years ago) had a reverse mortgage on his house. Luckily for my mom, when my grandma died, she left her her house which she had originally paid cash for back in the 70s. (My grandma was the type that was like, “Why do I need a checkbook? I can use my cash to pay for things.)

    I don’t have a set age yet, but I suppose I should play with some calculators and come up with an idea. I think I would like to be able to spend a little bit more money on things in my retirement, since my income is currently so low.

    If you are able to retire in your late 40s, early 50s, wow, Eddie, that would be amazing and awesome!

    You are correct though – you need to have a plan for what you want to do in retirement and how you are going to afford things. When my dad retired, he became very depressed and I know he started taking anti-depressants. It’s such a huge change.

    1. We try our best to live a simple life and hopefully we can maintain that. You really never know what is going to happen. You can prepare the best laid out plan, but life does happen. I will continue to save and invest for the future. If I am able to retire early that will be great.

      I have also seen people get depressed after they retire and I would like to avoid that if possible. I am hoping that I will still be blogging, so that should help a little. I love hearing from people like you. This is truly a journey that I hope we all share together. Life is not worth living if you do not have people to share it with. Thanks as always for your comments.

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