When will I retire? In the past, the answer used to be common for many people: 65 years old. People stayed employed by the same company throughout their career, and that company offered a guaranteed pension when they retired at a certain age – usually 65, which also used to be the age that full social security benefits set in.
But according to an article by US News, 65 is no longer the average age people expect to retire. With employee sponsored pensions plans becoming a thing of the past for more and more companies each year, and the new age to access full social security benefits being 67, almost 40% of the people surveyed by US News believe they will retire after 65. They also said that in 1995, 49% of adults expected to retire before 65, but as of 2010 that number dropped to 26%.
So Why the Shift?
One of the reasons for the shift is that retirement is not as cut and dry as it used to be. One’s financial situation, job satisfaction, lifestyle preferences, and health are important factors each person has to consider. Some people enjoy their job and choose to work longer. Other people continue to work longer in order to achieve a better lifestyle for themselves during retirement (or maybe for their children attending college).
Another factor is that people need to plan for retirement on their own instead of being offered the stable monthly pension that was managed for them. Many feel that they lack the information or knowledge to properly prepare for retirement, while others think they are sufficiently prepared only to realize in their 50’s or 60’s that they are not.
And lastly, people are living longer these days. Retiring at 65 could mean 35+ years of retirement to fund, which can seem daunting to many people.
But Don’t Get Depressed Yet!
More and more people are finding that by living below their means and not accumulating a lot of debt throughout their lives, that early retirement is an attainable goal, it just requires discipline. So whenever you think you may want to retire, whether it’s early or later in life, the best thing you can do now is prepare yourself and know if you’re on the right track. Check out this post I did a while back where I rated some of the most popular retirement calculators and find the best one for you and your situation. If you’re single, think about what retirement looks like for you, evaluate whether you’re on track for that, and assess what changes need to be made if any. If you’re married, do the same thing but make sure you’re having this conversation with your spouse and that you’re both on the same page with your financial goals.
And I just hope I’m able to find this tiara when I’m ready to retire!
Photo Credit: Steven Depolo