Author: MJT
What’s the Best Early Retirement Age?
For some, the thought of being free of the responsibilities
of maintaining a career is something that’s looked forward to fondly. Early retirement can give an individual the
time to pursue personal goals rather than staying focused on someone else’s
tasks for forty or more hours a week.
But what’s the best age for early retirement? It varies from person to person, but the
deciding factor in all cases will be whether or not you can support yourself
for the rest of your life, and several things factor into the decision to take
retirement at an early age.
Pension
Make sure that your pension has accrued enough funds for you
to have a comfortable monthly payment for the rest of your life. Remember that because you’d be at an age for
early retirement, you’ll be getting less than you would if you had waited. Things such as using your IRA to supplement
the income can help, but keep in mind that you have to be over 59 years of age
to take money from your IRA without being heavily taxed. But the main benefit to payment from pension
is that it’s steady, predictable income, and unless you have a large amount of
money already saved, you will want to make sure you have pension benefits to
back you up.
Social Security
Social Security payments will also end up being a good
source of steady income once you’ve retired, but keep in mind that these
benefits don’t kick in until you’re 62, and then the benefits are reduced. Of course, if you wait that long to retire,
you’re barely counting as having an early retirement age! If you retire much earlier than this, though,
be careful. Social security benefits are
based off the average of your best yearly salary for 35 of your working
years. If you’re retiring after only 20
years of being in the working world, then expect small social security benefits
when you hit the age to receive them.
Willing to Work?
Sure, it seems ironic to think about working after you’ve
retired, but plenty of people who are of early retirement age but not ready to
fully leave the working world take part-time jobs. The benefits to this are not only extra income,
whether it’s for play or to supplement early retirement benefits, but a person
can concentrate on doing jobs that they want to do, often with reduced hours,
and not have to worry about layoffs or advancing in a career. And for some, it keeps them from becoming too
lazy in an early retirement. But whether
you work or play golf instead, taking a look at where your sources of income
will be from will help you to determine your ideal early retirement age.
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