Determining the Right Retirement Age

Written by: Scott Sery

At some point in our lives we all want to retire. Nobody has the goal of needing an income until they die from exhaustion. While many people will continue to work past their retirement age simply because they want something to do, they will work doing something they want to do, rather than something they have to do. The biggest question for most people is what is the right age to retire?

There is no answer that fits everyone. Each individual should determine what age they want to retire. Personally, I would love to retire tomorrow. I have enough hobbies and interests that could last the rest of my lifetime; I doubt I would ever get bored. Since I would not be able to pay my bills if I were to retire tomorrow, I have to figure out what the earliest age I could retire at and still be able to live comfortably. Fortunately, the math is rather simple.

For most people they will retire on, at most, the same standard of living as they have now. In fact, the majority of people will retire on less than what they need now, since after retirement expenses (such as saving for retirement) will drop off. Mr. Money Mustache has a great post on his blog about how to determine when you will be able to retire based on your savings rate. Likewise, you can use the post to determine how much of your income you will need to save in order to retire at your desired age. For instance, if you spend 100% of your income, you will never be able to retire. Likewise if you save 100% of your income you can retire right now. The entire concept is fairly simple, just read through his post on early retirement (especially the chart) and see if you are saving enough to retire when you want.

While really there is no perfect retirement age, you can avoid the wrong time. If you consider your job your hobby, and you are completely happy with doing that forever, then keep saving (you can always donate your money or leave it as an inheritance if you do not need it) and keep working. There may be a point where you decide you no longer want to keep going, and you will be able to sit back and relax. Retirement is not a specific age, it is when you feel you have enough to retire, are done working, and want to enjoy your life. The best advice is to save as much as you can now, even if it is more than you think you will need, so when or if the time comes when you want to retire, you will be able to retire. Of course retiring often means going to work your dream job, or volunteer.


Determining the Right Retirement Age

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