Is 61 Years Old The Ideal Age to Retire for Americans?

When asked when the best time to retire is, most Americans think the ideal age to stop working and retire is around 61 years old. They think they’ve been working long enough already to be entitled to the benefits and social pension they have. Unfortunately, these top financial planners don’t think so. If anything, they want you to wait a little bit longer.

On Retirement Savings

According to most financial advisors, 63 years old is a more realistic age to retire. Meanwhile, nearly one in every five respondents also say you should wait until you hit 70 to claim your Social Security benefits.

According to Orman, the Statistics show that more Americans tend to live longer than in the previous generation, so you should let your retirement savings grow more to help sustain your life stronger. She adds that while you already have saved a breeze for 15 years or so, it’s not enough to sustain you for 40 more years. If you stop working in your 60s, your retirement savings might not be enough to support you for 30-40 years longer, since you only saved up to 15 years based on your current retirement funds.

The former CNBC Host and current award-winning financial advisor Suze Orman also couldn’t help but agree to his co-advisors’ suggestion.

A separate report from Stanford Center on Longevity also showed a similar conclusion. The researchers analyzed over 292 retirement strategies and they discovered the key component to have a comfortable retirement is by delaying your claiming of Social Security benefits until they reach the age of 70.

In this way, you can still work enough to pay for your expenses and save more money until you hit the 70s while your Social Security benefits continue to accumulate. It’s also safe to file your claim within the age range since you don’t need to cover up for early retirement fees or have the risk of reducing your retirement funds.

The New Retirement Age

According to the researchers, the age 70 is the new 65. They also recommend the retirees to reduce their living expenses significantly to survive to work and live until they hit the age of 70 to claim their benefits.

But if you really couldn’t wait longer and want to leave your workspace when you reach the 60s, the financial experts advise you to use your other retirement savings to support your living expenses. As much as possible, do not touch your Social Security benefits yet.

You can compute how much money you need to save to cover up your Social Security benefits. For example, assuming at age 65 you would start receiving $20,000 per year, delaying you came for five more years amounts to $100,000. You can raise this money before you reach 65 years old and start withdrawing it to support yourself from age 65-70 before you start claiming your benefits.

How to Prepare Your Retirement Funds?

But if you don’t have the financial capacity to do that and you cannot wait to start retirement, the best age to start claiming your retirement benefits is at least 62 years old. You can start receiving partial benefits until you reach the full benefit age of 66 years and 2 months if you’re born in 1955.

Meanwhile, it’s age 67 for those who are born in the 1960s or later. If you want more freedom to retire, the financial advisors recommend you start saving early. According to Lauryn Williams, you can start saving as early as the age 19.

Williams tells Bankrate you can start saving as soon as you graduate from college and you get settled in your first job.

She also recommends automating your savings even before you receive your salary to establish the habit of saving. In this way, you’re not only putting a little nest egg for yourself but also for your retirement and future too. You can put your small amount of savings on a regular basis in Roth IRA or 401(k) plans.

While the Bankrate website reiterates everyone’s financial scenario is quite different, and everyone can choose to retire on their own discretion, we all need to do one thing, though, and that is to save money. You need to determine how much money you need to save and establish the habit of saving to accomplish all your financial goals according to the timeline you’ve set and to retire comfortably in the future.