Should You Retire at 65? Why the Right Retirement Age Is Personal

A recent AAA study found that speeding has become pretty normal for American drivers. Going 10 miles per hour over the speed limit is widely considered acceptable, and nearly half of those surveyed believe keeping up with traffic can actually be safer than following the posted speed limit.

I have to admit, I understand the keeping up with traffic mentality. I like to get places quickly.

But it got me thinking about something I see all the time in retirement planning.

Sometimes we make decisions simply because everyone around us is doing the same thing.

One of the biggest examples is retiring at 65.

Do You Have to Retire at 65?

No. Turning 65 does not mean you automatically have to retire.

Age 65 has become a natural retirement milestone largely because that is when most Americans become eligible for Medicare. For generations, we have also heard 65 referred to as the traditional retirement age.

But your retirement date should not be determined by tradition.

Some people reach 65 and are not financially or mentally ready to retire. Others are ready at 62, 63 or 64 but assume they have to keep working because they need employer provided health insurance.

I think there is a better question than asking, "When am I supposed to retire?"

Ask yourself, "When do I have the financial freedom to retire?"

Those are two very different questions.

Can You Retire Before Medicare at 65?

Possibly.

I recently met with a couple who were both 62. The husband was at the end of his rope with his job. He was miserable, but his employer provided their health insurance.

He told me, "Greg, I guess I'm just going to have to stick it out for three more years."

I asked him why.

His answer was healthcare.

He assumed that because private health insurance could be expensive, he had no other choice but to keep working until Medicare began.

Instead of accepting that assumption, we ran the numbers.

We created a written retirement income plan and accounted for the additional healthcare expenses they could face during those first three years. We planned for extra income specifically to help cover that expense until Medicare eligibility.

Then we looked at everything else they wanted retirement to include.

He loves fishing in Canada. He and his wife enjoy traveling. They spend time boating on Lake Erie during the summer.

Once everything was on paper, I was able to show him that retirement could potentially work now.

He looked at me and said, "So what you're telling me is I can retire right now if I choose to?"

Yes.

Sometimes Knowing You Can Retire Changes Everything

Here is the interesting part.

He did not retire.

When we met again, he told me he was choosing to continue working. But there was a huge difference now.

He knew he did not have to.

If he decides tomorrow that he has had enough, there is a plan.

If he works another year, there is a plan.

If he works until 65, there is a plan.

To me, that is one of the most powerful benefits of retirement planning.

Choice.

What Determines the Right Retirement Age?

Your retirement date should take into account your income needs, savings, investments, healthcare costs, Social Security strategy, taxes, and the lifestyle you want to live.

It should also consider something that does not always appear on a spreadsheet.

How do you feel about continuing to work?

If you love your career, there is nothing wrong with continuing beyond 65.

If you are miserable and financially capable of leaving earlier, there is nothing magical about your 65th birthday that says you must wait.

Just because everyone else is taking the same exit does not mean you have to follow them.

Your retirement date should be based on your plan, your goals, and your life.

If you are wondering whether retirement might be possible sooner than you think, the best first step is simply to see what the numbers say. Our team at Legacy Retirement Group can help you look at your income, healthcare costs, and retirement goals so you can better understand your options. Visit LegacyRetirementGroup.com or call our office at 614 336 7660 to start the conversation.