Michigan Office of Retirement Services sent this bulletin at 11/23/2021 05:00 PM EST
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What age is the best age to retire?
No one can answer that question for you. But with careful planning and thoughtful preparation, that choice will be easier for you to make when the time comes. Here are some things to keep in mind when making your decision: - No matter what age you retire, it’s important to start saving more now.
Starting to save for retirement early in your career is an action you likely won’t regret. Not starting early can complicate your ability to build an adequate amount of retirement income. Even starting at age 35 means you can have more than 30 years to save. You can also still benefit from the compounding effects of investing in tax-sheltered retirement vehicles such as the State of Michigan 401(k) and 457 Plans. It’s never too late to start saving, no matter what age you decide to retire. - Did you know that every type of retirement benefit has a different eligibility age?
As you’re planning for your retirement, consider these important ages when developing your personal retirement plan:- Age 50 – You can take advantage of catch-up contributions to your 401(k), 457, IRA, and 403(b). We’ll share more about catch-up opportunities next month.
- Age 62 – You are eligible to begin reduced Social Security payments. Learn more about Social Security here.
- Age 65 – Your Medicare eligibility begins.
- Age 66 –Full Social Security retirement age begins for most Baby Boomers.
- Age 67 –Full retirement age for Social Security benefits if born in 1960 or later.
- Age 70 – To increase monthly benefits delay claiming Social Security payments until70.
- Age 72 – Minimum distributions from 401(k) plans and IRAs are required.
Make sure you thoroughly understand the rules regarding the age for receiving these benefits to avoid any penalties. This will help you decide on when to quit working. Members of the ORS Defined Benefit plan should login to miAccount and do a pension estimate to see what date you can plan for. If you participate in the State of Michigan 401(k) or 457 Plans, log in to your Voya Financial account to set up a retirement scenario there. ORS and Voya want to help you along your journey to a successful retirement, no matter what age you decide to stop working. Being engaged in your retirement planning is an important first step.  Throughout the month of November, we have been sharing information about Women & Retirement on our social media pages. If you missed it, here’s a recap: - Based on your age, how many multiples of your annual income should you have saved? Speak with a financial planner and consider your retirement goals. Account Login (voya.com)
- Have you decided what age you’ll retire? Use this helpful budgeting tool from Voya.
- Are you mentally ready to retire? Learn about being retirement ready here: Retirement Top Risks
- Determining your retirement age is one of the most important steps in preparing for retirement. Everyone’s decision is different. Deciding when to retire
Remember, retirement is a journey and we are here to help you along yours. Follow us on Facebook and Twitter and share this email with others in your life that you think would benefit from these messages. | |
FAQs
Age 66 – Full Social Security retirement age begins for most Baby Boomers. Age 67 – Full retirement age for Social Security benefits if born in 1960 or later. Age 70 – To increase monthly benefits delay claiming Social Security payments until 70. Age 72 – Minimum distributions from 401(k) plans and IRAs are required.
What is the best age for a woman to retire? ›
The normal retirement age is typically 65 or 66 for most people; this is when you can begin drawing your full Social Security retirement benefit. It could make sense to retire earlier or later, however, depending on your financial situation, needs and goals.
What is the smartest age to retire? ›
67-70 – During this age range, your Social Security benefit, if you haven't already taken it, will increase by 8% for each year you delay taking it until you turn 70. So, if your benefit will be, say, $2,500/month if you start at your full retirement age, it would be more than $3,300/month if you can wait.
What is the best age to retire for happiness? ›
On average, both retirees and pre-retirees said 63 is the ideal age for retirement — and current retirees left the workforce pretty close to that mark. The survey found that 62 is the average retirement age, but future retirees may have some challenges retiring on time.
Should I retire at 62 67 or 70? ›
If you file as early as possible -- when you turn 62 -- your benefit check will be reduced by up to 30% compared to what you'd receive at your FRA. If you delay benefits until you're 70, you'll receive your full benefit amount plus a bonus of between 24% and 32% per month, depending on your FRA.
At what age do you get 100% of your Social Security? ›
The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67. The chart on the next page lists the full retirement age by year of birth.
At what age do most Americans retire? ›
Some people are able to retire relatively early — even in their 40s sometimes — while others work well into their 70s and even 80s. What is the average age of retirement in the United States? Right now, the average age for men to retire is 65 while the average age for women to retire is 63.
What is the best age to retire for Social Security? ›
You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.
What is the best month to retire in 2024? ›
December is often selected as a favored month for retirement due to several reasons: Year-End Financial Planning: Retiring at the end of the year allows you to maximize your retirement contributions and take full advantage of any employer-matched funds for that year.
What is the best time of year to retire for tax purposes? ›
The very beginning or end of the year - If you don't have access to a healthy cash reserve that could cover multiple years, this might be a good option. When you do this, you're not pulling money out of your retirement account when you could be put in a higher tax bracket with earned income.
There was never a “golden age” of retirement in America. Retirees 30 or 40 years ago did not have it better than retirees today. Retirees do not have it so much better in other countries. There is no nirvana of free everything for the over-65s.
Do you live longer if you retire earlier? ›
No Evidence for Early Retirement Increasing Mortality Risk
In studies that did not account for individuals' prior health status and demographic factors, on-time retirement was associated with a higher risk of mortality compared to those who continued working beyond the retirement age.
How do you know when it's time to retire? ›
If you feel like you've completed what you set out to do with your work, that is one indication it may be time to let it go. When you are financially secure enough that you no longer need the income, and feel that you have done all you need to do at your job, retiring might be the right choice.
At what age is Social Security no longer taxed? ›
There is no age at which you will no longer be taxed on Social Security payments. So, if those payments when combined with your other forms of income, exceed one of the two thresholds, then you will have to pay at least federal taxes on either 50% or 85% of the benefits you receive.
What is the #1 reason to take Social Security at 62? ›
When it might make sense to take Social Security at 62. You need the money now. You have health issues that may shorten your life expectancy, or you don't expect to live past your break-even point. You're receiving early retirement from an employer and the benefits end at age 62.
How do I get the $16728 Social Security bonus? ›
Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
Why is retiring at 62 a good idea? ›
You Have the Chance to Enjoy it Longer
Compounding this is that the stress of work can actually contribute to health issues, so if you stop working sooner, you may remain healthier longer. No longer having to work means you have time to work on yourself!
Is it better to retire at 63 or 65? ›
Early retirement can affect your Social Security benefits. If you retire at 63, you can start drawing your Social Security benefits even though they will be around 25% to 30% lower than if you wait until after your full retirement year. Retiring later rather than earlier may benefit you in other ways.
What is the ideal retirement amount by age? ›
By age 35, aim to save one to one-and-a-half times your current salary for retirement. By age 50, that goal is three-and-a-half to six times your salary. By age 60, your retirement savings goal may be six to 11-times your salary. Ranges increase with age to account for a wide variety of incomes and situations.
