When Can I Retire? What’s The Perfect Retirement Age?

Shawn Plummer

CEO, The Annuity Expert

When it comes to retirement, there are many questions people have. One of the most common questions is, “when can I retire?” This question is difficult to answer because so many factors play into it. This guide will explore the perfect retirement age and discuss some factors influencing it. Stay tuned for more information!

What Age Can You Retire Right Now?

Retirement age depends on several factors. Age 62 is the earliest you can start collecting Social Security, but that doesn’t mean the minimum retirement age should be when you start to receive benefits.

Your normal retirement age should be when both Social Security retirement benefits and retirement income collectively amount to 75% to 80% of your current income.

Why?

Because that’s when you’re most likely to have a comfortable retirement.

If you wait until later to retire, you may not have as much time to enjoy your retirement. And if you retire too early, you may not have enough money to support yourself.

So plan carefully and choose the retirement age that makes the most sense for you.

What Age Do Most People Retire?

Most people retire when their Social Security benefits and retirement income sources (combined) equate to at least 75% of their current monthly income.

For many people, annuities can provide a much-needed boost to their monthly income, helping to ensure a comfortable retirement. In addition, annuities can help to protect against the risk of outliving one’s savings.

How Can I Retire Early?

Use an annuity with an increasing lifetime income rider to pay you a monthly income with the ability to increase over the years to keep up with the cost of living. This type of annuity can provide a steady income in retirement, which can help cover your costs and make living easier.

Retirement Age Calculator

The average retirement age varies dramatically because everyone has different retirement goals. Everyone knows as the Social Security retirement age increases, the higher the monthly benefits you’ll receive, but most people don’t know when to start spending their hard-earned savings and how to spend them wisely.

Because annuities are the only retirement plan in the United State that guarantees an income for life, you can estimate how much income you can receive in addition to Social Security retirement benefits. Use our retirement age calculator below, then request a free quote from us.

How Can I Retire With No Money?

Many people dream of retiring early but don’t know how they would manage financially. The key is minimizing your lifestyle and working as long as possible.

  • For example, you might downsize to a smaller home or get rid of your car.
  • You can also look for ways to boost your income, such as starting a side hustle or working overtime.

One way to make retirement more affordable is to wait until your Social Security check is enough to cover your basic expenses. This way, you won’t have to worry about meeting your monthly financial obligations.

With some careful planning, you can retire with no money worries.

How Much Do I Need To Retire If My House Is Paid Off?

Figuring out when to retire can be a tricky balancing act.

On the one hand, you want to enjoy your golden years as soon as possible. But, on the other hand, you want to ensure you have enough money to last throughout your retirement.

One way to help determine the best time to retire is by looking at your current monthly expenses.

  1. Start by subtracting your mortgage payment from your total monthly expenses.
  2. Then, time when your Social Security benefits and your retirement savings (using our calculator) will generate enough money to cover the remaining monthly expenses amount.

Annuities can help determine your perfect retirement age because the monthly income is guaranteed. Because of this contractual guarantee, you can pinpoint exactly when to claim benefits from Social Security.

So if you’re looking for a bit of guidance on when to hang up your work hat for good, an annuity may be the answer you’re looking for.

Where Should I Put My Money If I Want To Retire Early?    

When it comes to retirement planning, there are a lot of different retirement plans to choose from. For example, if you’re looking to retire early, you must decide how you want to invest your money.

  • Do you want to take the gamble and invest in the stock market?
  • Or do you want to guarantee your retirement income with an annuity?

With the stock market, there’s no telling how much money you’ll make or lose. You could retire early if the market does well, but you could also work longer than you wanted if the market takes a dip. An annuity with a lifetime income rider takes the guesswork out of retirement planning. You can know precisely when and how much money you’ll need at an early retirement age.

Of course, there’s no guarantee of how much interest you’ll earn with an annuity. But an annuity is worth considering if you’re looking for a way to guarantee your retirement income.

Is There A Penalty For Taking A Pension At 55?

Many people are surprised to learn there can be a penalty for taking pension benefits at 55. The IRS imposes an early withdrawal penalty of 10% of the amount withdrawn. However, there are some exceptions to this rule.

For example, if you take a 72(t) distribution, you will not be subject to the early withdrawal penalty.

If you’re still unsure whether you will be penalized for taking your pension early, it’s best to consult with a financial advisor or tax specialist.

How Long Will My 401k Last After Retirement?

Many people worry about whether their 401k will last through retirement. However, a few simple rules of thumb can help ensure that your savings will last as long as you need them.

  1. First, most financial advisers recommend using a 4% withdrawal rate. So, for example, if you have a 401k balance of $100,000, you will withdraw $4,000 per year. However, this rule has been debunked in recent history.
  2. Second, you may consider using annuities to generate income in retirement. Annuities are insurance products that provide guaranteed income for life. These tools can help ensure you never run out of money in retirement.
  3. Finally, remember to keep an emergency fund if unexpected expenses arise.

By following these simple tips, you can help to ensure that your 401k will last throughout your retirement years.

How Do I Find Out How Much Social Security I Can Get?

There are several ways to determine how much Social Security monthly benefit you can get. The easiest way is to use the Social Security Benefits calculator on the Social Security website.

You need to input basic information about yourself, such as your date of birth and current earnings, and the calculator will give you an estimate of your retirement benefits.

You can schedule an appointment with a Social Security representative if you want a more personalized estimate. They will be able to give you a more accurate estimate based on your situation.

Either way, it’s easy to start figuring out your Social Security benefits.

Is It Better To Take Social Security At 62 Or 67?

There’s no easy answer when deciding when to take Social Security. The age at which you start receiving retirement benefits will affect the total amount of money you receive over your lifetime.

The total retirement benefits you will receive over your lifetime are essentially the same, regardless of when you start receiving them. However, the monthly retirement benefit is higher if you wait until later because you have less life expectancy. So if you can afford to wait, getting a higher monthly retirement benefit may be worth it.

  • Taking retirement benefits early (minimum age 62) will mean smaller monthly payments, but you’ll receive them for longer.
  • Waiting until full retirement age (67 for people born after 1960) will result in larger monthly benefit payments, but you’ll receive them for a shorter period of time.

There are several factors to consider when to begin receiving benefits, including your health, life expectancy, if you pay Social Security taxes, and financial situation.

The best retirement age to collect benefits depends on your circumstances.

Can You Live Off Social Security?

Many seniors rely on Social Security as their primary source of income in retirement. But with the cost of living continuing to rise, some wonder if they can live off Social Security alone.

The answer is that it depends.

Social Security was never intended to be a retiree’s sole source of income. Instead, it was meant to supplement other sources of income, such as pensions and savings.

That said, it is possible to live off Social Security, but it will likely require a significant reduction in lifestyle.

How Much Savings Should I Have At 40?

In your early 40s, you’re probably starting to think about retirement. And one of the first questions you might ask is, “How much should I have saved by now?” 

The answer, of course, depends on several factors, including your target retirement age and your desired retirement income amount.

For example, if you want to retire at 65 and think you’ll need $100,000 per year to live comfortably, you’ll need to have saved $750,000 by the time you reach age 40 if you’re using an annuity.

Another way to communicate this is, if you are 40 and invest $750,000 into an annuity with a lifetime income rider today, at age 65 (when you retire), you are guaranteed to receive roughly $100,000 a year for the rest of your lifetime.

This is a fraction of what other publications tell you what you need to retire with.

How Much Do I Need To Save For Early Retirement?

There’s no one-size-fits-all answer to this question, as it will vary depending on factors such as your desired lifestyle and expected lifespan. However, utilizing an annuity will most likely provide you with the most efficient results at a cheaper cost.

Also, reconsider early retirement benefits, and consider what expenses you’ll pay when getting older such as long-term care. The Federal government says retirees will have roughly a 70% chance of entering a nursing home, assisted living facility, or home health care. These costs are incredibly expensive and are only increasing as years go by.

Will My 401k Still Grow If I Stop Contributing?

Even if you’re no longer actively contributing to your 401k, the account can continue to grow.

That’s because 401ks typically contains a mix of investments, including stocks, bonds, and mutual funds. And as these investments increase in value over time, so will your account balance.

Of course, the growth rate will depend on the overall market performance. But as long as you keep your account invested, there’s a good chance it will continue to grow, even if you’re not making regular contributions.

So if you’re wondering whether it’s worth keeping your 401k, even if you’re no longer actively contributing, the answer is yes!

Can I Contribute 100% Of My Salary To My 401k?

Most 401k plans have a maximum contribution limit, which for 2022 is $20,500. However, if you’re over 50, you may be able to make catch-up contributions of up to an additional $6,500. So if you’re over 50 and your employer allows it, you could technically contribute up to $27,000 to your 401k in a given year.

Unlike a 401(k) plan, a deferred annuity has no contribution limits. This means you can save as much as you want for retirement, which can be a real advantage if you’re trying to catch up on your savings.

In addition, deferred non-qualified annuities offer the same tax-deferred growth retirement benefit as 401(k)s and help you reduce your taxes in retirement because only the interest is taxable versus the entire amount withdrawn from a 401(k).

Plus, with a fixed index annuity, your investment is protected from losing money to market volatility.

And if you choose a deferred annuity with a guaranteed income rider, you can create a retirement income that will last for the rest of your life.

So if you’re looking for a way to maximize your retirement savings and income potential, a deferred annuity may be right.

Is A 401k Worth It Anymore?

A 401k is still one of the best options for retirement planning. Although the stock market can be volatile, it has consistently outperformed other investments, such as bonds and real estate, over the long term. Furthermore, 401ks offer several advantages that other investment vehicles do not, such as employer matching contributions and tax-deferred growth. For these reasons, 401ks remains an attractive option for anyone looking to secure their financial future.

However, fixed index annuities with premium bonuses mimic the employer match. Non-qualified annuities reduce the tax bill to a fraction compared to a 401(k). Annuities with a lifetime income rider can guarantee how to reach your future retirement income goals starting today, taking all the guesswork out of retirement planning. Fixed index annuities protect your retirement savings from losing money due to stock market volatility.

Is A Pension Better Than A 401k?

When it comes to retirement planning, there are a lot of different options to choose from. Two of the most popular options are pensions and 401ks. Both have distinct advantages and disadvantages, so it’s essential to understand their differences before deciding.

  • Pensions are typically offered by employers and are based on years of service. They often offer guaranteed income for life, which can be a significant security blanket in retirement. However, pensions can be inflexible and may not keep up with inflation.
  • 401ks, on the other hand, are portable and offer more flexibility regarding how much you can contribute and when you can access the funds. They also tend to have higher contribution limits than pensions. However, 401ks don’t offer the same guaranteed income in retirement, so it’s essential to consider all your options before making a decision.
  • A fixed index annuity (FIA) with a lifetime income rider is the best of both worlds regarding retirement planning. It offers a pension guarantee, with the added flexibility and portability of a 401(k). Plus, it keeps up with inflation and has zero contribution limits. And, if you need access to your funds, they are always available through the annual penalty-free withdrawals. 

So whether you’re looking for guarantees, flexibility, or the peace of mind that comes with knowing you have a plan, a fixed index annuity with a lifetime income rider is the way to go.

What Is The Safest Way To Save For Retirement?

Fixed index annuities are one of the safest ways to save for retirement. With a fixed index annuity, your principal is guaranteed, and you’re credited with a fixed rate of interest or the growth of an index, such as the S&P 500. That means your retirement savings are protected from stock market losses while still having the potential to grow.

Additionally, fixed index annuities can help bridge the gap by guaranteeing a fixed income for life. With a fixed index annuity, you know exactly how much money you will have every month, and you can plan your budget accordingly. Other retirement savings plans, such as 401(k)s and IRAs, do not offer this same income guarantee level.

Fixed index annuities can give you the peace of mind that your retirement income will be secure, no matter what happens in the stock market or the economy.

How Much Money Should You Have In Savings At Retirement?

At a minimum, you should aim to have enough money to cover 75% of your current monthly expenses. This will help ensure you can maintain your current lifestyle even after you stop working.

Use our annuity calculator to estimate how much your retirement savings will generate in retirement income. Then combine your Social Security Benefits with the annuity’s lifetime income, and determine whether the monthly amount equates to 75% or more of your current monthly income.

If the combined monthly income (SSI+Annuity Income) is lower than 75% of your current monthly income, consider buying the annuity now, letting it accumulate, and retiring at an older age.

How Can I Save For Retirement If I Don’t Have A 401k?

Many think that 401ks is the only way to save for retirement, but that’s not true. There are several other options out there, including fixed index annuities.

With a fixed index annuity, you benefit from the market’s upside potential without worrying about the downside risk. That means you can grow your retirement savings without worrying about losing them if the market takes a downturn.

And best of all, fixed index annuities come with better tax advantages that can help you keep more of your hard-earned money.

So if you don’t have a 401k, don’t despair. There are still plenty of ways to save for retirement.

Things To Consider On When To Retire

  • Taxes: Most experts agree that taxes will only increase in the future, so taking steps to minimize your future tax liability is essential. There are several ways to do this, but some of the most effective include investing in tax-advantaged accounts, such as Roth IRAs and non-qualified annuities. Age 72 is the mandatory retirement age for 401(k) and traditional IRA plan owners because the IRS request required minimum distributions (RMD) to be withdrawn.
  • Inflation: As the cost of living continues to rise, it’s vital to ensure that your retirement savings will keep pace. An annuity with an increasing lifetime income rider can help you maintain your purchasing power, no matter how high inflation is. This type of annuity provides a stream of payments that increases over time, keeping up with the rising cost of living. That means you won’t have to worry about your retirement income losing its value.
  • Required Minimum Distributions: For qualified accounts, like 401(k)s and IRAs, mandatory minimum distribution requirements (RMDs) begin at age 72. This means you’ll need to start taking withdrawals from these accounts, even if you’re not ready to retire. However, other types of accounts, like non-qualified annuities and Roth IRAs, do not have RMD requirements. This means you can leave your money invested for as long as you want, giving you more flexibility in retirement planning.
  • Long-Term Care Costs: There is a 70% chance you will need LTC services or facilities. LTC costs are only increasing, and they’re costly, and Medicare benefits don’t pay for them. Annuities can reduce this cost to a third compared to paying out of pocket. 
  • Protecting Your Beneficiaries: One of the best ways to financially protect loved ones after you’re gone is to have a life insurance policy. Then, if something happens to you, your loved ones will have a financial safety net to fall back on. Furthermore, any inheritance you leave behind will go through probate and be subject to estate taxes. However, if set up correctly, life insurance and annuities avoid probate and estate taxes. So not only will your loved ones be taken care of financially, but they’ll also save money.

Next Steps:

Now that you know some of the things to consider when planning your retirement, it’s time to start thinking about what you want your retirement to look like. If you’re not sure where to start, our team can help. We offer a free retirement planning calculator that can estimate how much income your retirement savings will generate and when your retirement age will start.

We also have a team of annuity specialists who can help you find the right annuity for your needs. So contact us today for a quote, and let us help you make the most of your retirement years!

When Can I Retire? What Is The Perfect Retirement Age?

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Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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