Retirement will be one of the most important events of your life. You should start planning for your retirement in your 20s if you want to have a secure and comfortable post-retirement life. Only after you decide your retirement age will you know how much you should save every month and what other financial aspects you need to look at. Her are some advantages and disadvantages of retiring early and retiring at 65 to help you make this important decision.
The earliest age at which you should consider retirement is 50. You could be someone who didn’t particularly enjoy your job but have stuck to it all these years because it paid well. And at 50, you may decide to retire from your current job pursue your other interests in life, even if they pay lesser. I would suggest that you don’t hang up your boots, but work in a part-time capacity or work from home.
This will provide you with some stable income so that you can live comfortably and not withdraw too much money from your retirement fund.
The advantage is that you will be finally doing what you wanted to do. You will get more free time to take up hobbies and to travel. Your retirement funds can still grow for a few more years until you have the luxury of fully getting involved in activities that do not generate an income. Until then you should rely on your new income and savings.
But there will be a problem if your other interests hardly pay anything. You may have to cut back on your spending and lead a frugal lifestyle. You should have paid off your mortgage and auto loans by this time. You should have also set aside money for your kids’ education.
Retirement at 65
If you are happy in your current job, there is no reason to look for an early retirement. Most Americans work until their 65th year. The only downside is that you may not be in the best of health to enjoy life as thoroughly as you had wanted.
But the advantage is that you would have set aside enough money for almost much anything that you may need, and you can live a life a luxury. Your children would also probably be financially independent by now. Now is the time you can relax with family, travel and indulge in leisure activities.