What is the perfect age to retire? Here are the 5 crucial questions you need to answer now – AOL

What is the perfect age to retire? Here are the 5 crucial questions you need to answer now

Sixty-one is the average age of retirement, according to 2022 analysis from Gallup. But is that really the perfect age for you?

Most workers wont be able to start claiming their Social Security benefits until the next year. And even then, youll only be entitled to a portion of the full amount.

Picking the right time to give up work and live off your savings can be daunting. If you retire too early, you risk missing out on additional income. Too late, and youve lost some quality time with family or the ability to do the things you love. Here are five questions to ask yourself before making this decision.

While the median age of retirement is 62, life expectancy in the U.S. is 77.5 years as of 2022. That means most retirees can expect about 15 or 16 years of retirement. However, you should also consider the quality of life in these later years.

You could enjoy all 15 years (or more) if youre healthy. But if you have an underlying medical issue, some of those years might not be as enjoyable. You also need to consider the additional costs. The average healthy 65-year-old is expected to spend $404,253 on health care costs over their lifetime, according to RBC Wealth Management. These are out-of-pocket and dont include the costs of long-term care.

Serious illness and inflation can raise these costs, too. Consider these risks while crafting your retirement plans.

Your career has a significant impact on your retirement. If you have a high-paying desk job, you might be accustomed to a lifestyle thats more expensive to maintain. If you do physical labor, you need to consider the impact on your body and the potential for an early retirement simply because of the physical toll its taking.

But, you might love your job. If work is play, why give it up? Warren Buffett was rich enough to retire decades ago but still shows up to work at 93. If youre fortunate enough to be in a similar position, consider delaying retirement.

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Aligning your retirement plan with your partner should be a key consideration. This is true even if youre divorced, since you might have to factor in child support payments.

If you live with your partner, consider their age, medical needs and capacity to work. Plus, your partner might expect you to spend more time with them after they retire, which effectively prepones your retirement. Alternatively, you might have to work longer to support their spending needs or medical requirements. Keep this in mind as you get closer to 60.

Children are another major factor when considering retirement. Your children could delay or prepone your retirement, depending on their financial independence. A recent Bankrate survey found that 68% of parents with adult children have made financial sacrifices to help them. A monthly allowance, rent support or any other form of financial assistance needs to be factored into your retirement plan.

If youre planning to leave your kids an early inheritance due to tax concerns, this needs to be part of the plan too.

After youve considered all of the other questions on this list, it all comes down to the most important one: money.

Figuring out how much money you need is tricky. Many people use the 4% rule (which refers to how much retirees should withdraw each year from their retirement savings). This implies that a person needs at least 25 times their annual expenses to retire. Assuming your annual expenses are $60K, you might need $1.5 million to retire. If you have that already, theoretically, you could retire today.

But if you think you need more, or if you estimate higher expenses in retirement, your target should probably be higher. Working with a professional financial adviser can help you figure out how long it will take to get there.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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What is the perfect age to retire? Here are the 5 crucial questions you need to answer now - AOL