When can I retire? Due to the Social Security Administration's (SSA) increase in the full or “normal” retirement age, many Americans are delaying retirement in an effort to receive their full benefits. So even though you can begin collecting your benefits as early as age 62, doing so means you'll experience a reduction of benefits, which is why many of us are choosing to work longer.
Retiring early or retiring later both have their advantages and disadvantages. For example, delaying retirement may mean an increase in benefits but a shorter period of time in which you'll receive them. Retiring early may mean a benefit reduction, but you'll receive your benefits for a longer period of time. To determine what your full retirement age is, visit the SSA's Retirement Planner website.2
Your Medicare eligibility.Most people can qualify for Medicare as early as the month they turn age 65. Retiring before you are eligible to receive Medicare coverage could mean having to fund your health care on your own.
If you retire and walk away from your employer-sponsored health plan before you reach age 65 and are eligible for Medicare, you'll have to fill the gap with a private health insurance plan or Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage — both of which can be very costly.
More time to pay down debt and save.
Many Americans are choosing to retire later simply because they need more time to get out of debt and save. In fact, 18 percent of employees surveyed by Gallup said they will continue to work part-time past retirement age because they will have to.3
Social Security was meant to be a supplemental source of income during retirement - not the sole source of income. This means many of us will be relying heavily on what we managed to save while we are still working (think employer-sponsored 401(k) plans and IRAs). The fact is, the more we can save and pay down debt before officially retiring, the better.
What is the ideal retirement age?
That's an individual decision for you to make and is dependent on many factors. Whether out of choice or necessity, 40 percent of Americans believe they will retire after age 65.4