What is the best age to retire?

**corn18** · 02-28-2016, 07:27 AM

This is by far the most complex question I have ever addressed with respect to financial planning. Just turned 50 and I'm trying to figure this out now. In order to retire at our desired level of retirement spending, I need to work and save at my current pace until age 57. If I work an extra 2 years, I will ensure a legacy for my children. If I retire now, we could live just fine on our $50k / year from my pension and retirement funds until social security kicks in at 62 and then be great by most measures. But that would be a significant hit to our current standard of living. First world problems, right?

What we are leaning towards now is 4-5 more years at my current, very high income level and then look at a different job paying a lot less until I turn 60. That would provide a nice balance between work and home life. I won't "retire" at 55, just change to a job I really enjoy and provides significant flexibility as far as time off. Then @ 60, I probably still won't retire because I am one of those type A types that can never retire.

But everyone is different and therefore, your question will have millions of different answer. Thinking about it and working through the options is critical to being happy when you finally win the game.

Tom

**snafu** · 02-28-2016, 08:22 AM

ahlerka, are you nearing retirement age? What is your vision for yourself and family as a retiree? Many of us define who we are by the work we do and there is a huge expanse of time to fill when work/employment plus transportation time is removed. Do you have a satisfying hobby? Do you enjoy volunteer activities? We bought a condo in an old complex to facilitate our desire to take international contracts. After moving in, we discovered the majority of residents were seniors. In hopes of being helpful, I offer anecdotal observations...

The state of people's health seems to be a giant factor in retirement choices of people who live in this condo complex. Those who retired in their 50's seem to have medical issues or their partner have very serious medical problems. There are a large number of accountants, nurses, politicians, police over 70 [possibly over 80, rude to ask] who continue with contract/part time or sessional work.

Finance seems to be the smallest concern of retirees as many still have defined pensions or accepted the idea of long term savings seriously and invested in our modest, easy to understand economy. I've the impression that the seniors I see regularly have always functioned with the constraints of a budget at work and at home. I like to think I'm a planner but truthfully, they run circles around me!

There seems to be a distinct pattern. The first two years are full of activity, refurbishing, fixing, entertaining, and trying to get through a long list. The next 5 years seems to be volunteering, travel and focus on extended family. By year 7, focus shifts to health, [nearby] gym and new activities. Those in their 80's spend huge blocks of time working out low cost improvements for the complex and [likely] drive the Board and professional management nuts.

[Since the late 80's I've retired and rejoined the workforce several times due to health issues]

**LivingAlmostLarge** · 02-28-2016, 10:54 AM

It depends on the lifestyle you want. You could probably "retire" now and work part-time to sustain living. A couple on this board and many MMM followers do that. You could take a sabbatical or downshift into a lower pay less stress job. Or you could plan for an early retirement with same level of living. Or normal retirement because you hadn't saved as much or want luxury.

Too many factors to consider.

**disneysteve** · 02-28-2016, 11:34 AM

I don't think the age matters one bit. All that matters is the money. If I had enough to retire, I would happily do so today even though I'm only 51.

You really need to define what retirement means to you. Does it mean stopping work entirely? Or does it mean leaving your current career and perhaps doing something else for pay but on a much more limited basis? How much will you need to support your desired lifestyle? And how long does your nest egg need to last?

**Like2Plan** · 02-28-2016, 01:04 PM

I was ready at 55. DH is (almost) 61 and still not ready. We have our finances in order, but DH still gets something more than just a paycheck by going to work. He keeps saying in 1 or 2 years. Every year. His health is good. He says he mostly enjoys his work (I'd put it at a 80-85% satisfaction level

)

We both wish he could take more time off from his work, but that isn't in the cards for now. I look forward to when he retires (or even works part time) and we can take advantage of some off peak travel deals.

I think DH will like being retired, but only he can make up his mind on when it's time.

**FLA** · 02-28-2016, 02:33 PM

Had one free meeting with a Vanguard certified financial planner and then one with the guy who represented our 403B at work. Both said I could easily retire at 55, something I never even ran the numbers for, I was just hoping to get out at 62. Then I became disabled last year at 45, I hate calling it that and decided to call it early retirement in my head.

Well, I can say without hesitation that if I had had the goal and the means to retire at 45 with no worries, I wouldn't have been happy. I really loved my job and miss it so much I dream about it. Maybe it's because I am not well and can't do a heck of a lot and my financial picture is muddied, but I think I would've been very happy retiring early at 55, not 45. Early but not way too early, kwim? 55 you're usually young and healthy enough to do pretty much whatever you want; a second career, travel, volunteer, hobbies. For me, that should've been the perfect time.

**disneysteve** · 02-28-2016, 02:41 PM

Originally posted by FLA View Post

I think I would've been very happy retiring early at 55, not 45.

I'm sure your physical condition plays into how you feel about your early exit from the workforce.

That said, my cousin planned for retirement at 55 and did just that almost 5 years ago. He then had a house built in Florida and moved down there nearly 4 years ago. He couldn't possibly be any happier with his life. He doesn't miss work. He is active and involved in his community (he lives in a 55+ complex). And he gets to spend his days doing exactly what he wants to do on his schedule. Had he been able to get out earlier, he would have, but 55 was realistic money-wise.

**Fishindude77** · 02-28-2016, 03:13 PM

What are the important considerations that we need to keep in mind when we decide on the age to retire?

My thoughts:
No debt.
Adequate savings, investments or streams of income to pay all the bills and live a lifestyle you will be content with.
Enough money to last till you're at least 90 years old.
Plans to occupy yourself with all of your new free time.
Health insurance.
Then just take care of yourself and hope for good health.

**dawnwes** · 02-28-2016, 03:14 PM

My father is 82 and although technically he is retired, he still does a lot of consulting and some work. He has kept up all of his licenses.

But he wants to, he doesn't need to.

**greenskeeper** · 02-28-2016, 03:17 PM

asafp

**FLA** · 02-28-2016, 04:09 PM

one thing I think people don't tend to prepare for is the costs associated with the last few years of life, be it getting Alzheimer's or an illness that takes life faster. You can plan to live at a certain level of comfort but those last few years may have astronomical costs in terms of medical needs. People get wiped out fast by needing the in home care of an aide that here, through an agency, costs around $24 per hour. If you or your spouse needs a lot of care you can blow through your savings pretty quick. Or nursing home costs until the resident has paid enough to be eligible for Medicaid, which also affects how much the spouse can retain in retirement accts (of course there are ways around some of this that estate planners help with). If you're 85 and still want CPR and to be on a vent, there are potential hospital bills to deal with.

Patients I've had with long term care insurance fared much better than the average Joe. But I found I might only have 5 patients with that coverage in an entire year. Probably because of expense. So that is one expense I would at least consider in retirement planning.

**disneysteve** · 02-28-2016, 05:20 PM

Originally posted by FLA View Post

Patients I've had with long term care insurance fared much better than the average Joe. But I found I might only have 5 patients with that coverage in an entire year. Probably because of expense. So that is one expense I would at least consider in retirement planning.

My mom has had a policy for about 15 years. The problem is the rise in premiums over time. We were just reviewing her policy last week because she got her latest renewal notice with the latest price hike. I don't remember the exact figure but it is north of $3,000/year. Of course, it was far cheaper than that when she took out the policy. I can certainly understand that a lot of people can't afford that kind of coverage.

**corn18** · 02-28-2016, 05:38 PM

Originally posted by disneysteve View Post

My mom has had a policy for about 15 years. The problem is the rise in premiums over time. We were just reviewing her policy last week because she got her latest renewal notice with the latest price hike. I don't remember the exact figure but it is north of $3,000/year. Of course, it was far cheaper than that when she took out the policy. I can certainly understand that a lot of people can't afford that kind of coverage.

I looked into LTC insurance because it seems that it is critical to have. From my research, it used to be worth it, now, not so much. Looks like $3k / year gets me $150 / day for 3 years or $164,000 total coverage. I'm planning to self insure for that. Planning includes $300k of LTC self insurance in my retirement funds.

Tom

**tripods68** · 02-28-2016, 05:42 PM

I asked myself this all the time. Before I know when to retire, i have a list of things to accomplish before hand.

1.) Have i paid off my house? NO

2.) Net Worth 2 million? NO

3.) $500K Taxable account? NO

Should I accomplished this in 10 years from now or 5 years will dictate my retirement decisions.

BTW: social security age has no bearing to my decisions. I do have a pension that will pay me $47K (excluding spouse's pension) a year beginning at age 55 but that's not the main factor. I do plan to pay off my home in less than 8 years from now, pay college cost, and finished goal #2 & 3. I'm 47 years now and have plenty of time.

What is the best age to retire?