Retiring at 63 is a significant decision that requires careful consideration. While it may seem appealing to leave the workforce earlier and enjoy more free time, it’s crucial to weigh the advantages and disadvantages to determine if it aligns with your financial and personal goals.
Pros of Retiring at 63:
- More free time: Early retirement allows you to pursue hobbies, travel, spend time with loved ones, and engage in activities that bring you joy.
- Improved health and well-being: Leaving a stressful job can improve your physical and mental health, allowing you to focus on self-care and relaxation.
- Greater flexibility: You have the freedom to choose your schedule, travel when you want, and pursue new opportunities without being tied to a job.
- Potential for additional income: You can explore part-time work, consulting, or starting a business to generate additional income during retirement.
Cons of Retiring at 63:
- Reduced income: Your retirement income will likely be lower than your working income, requiring careful budgeting and financial planning.
- Smaller Social Security benefits: Starting Social Security at 63 results in lower monthly payments compared to waiting until full retirement age.
- Increased healthcare costs: You may need to cover health insurance costs until you become eligible for Medicare at age 65.
- Potential for boredom: Without the structure of work, you may need to find ways to stay engaged and active to avoid boredom and maintain a sense of purpose.
Factors to Consider Before Retiring at 63:
- Financial situation: Assess your retirement savings, investments, and potential sources of income to ensure you can comfortably cover your expenses.
- Health insurance: Explore options for health insurance coverage during the gap between retirement and Medicare eligibility.
- Social Security benefits: Consider the impact of starting Social Security early on your monthly payments and overall retirement income.
- Personal goals and interests: Identify what you want to do in retirement and how you plan to fill your time meaningfully.
- Lifestyle expectations: Determine your desired lifestyle in retirement and adjust your budget and plans accordingly.
Tips for a Successful Early Retirement:
- Start planning early: The earlier you begin planning for retirement, the more time you have to accumulate savings and adjust your financial strategies.
- Maximize retirement savings: Contribute as much as possible to your retirement accounts and explore catch-up contributions if eligible.
- Invest wisely: Diversify your investment portfolio to manage risk and ensure your money grows over time.
- Downsize your expenses: Consider reducing your living expenses to free up more funds for retirement.
- Explore part-time work or entrepreneurial opportunities: Supplement your retirement income with additional sources of income if needed.
Retiring at 63 can be a fulfilling decision if you plan carefully and make informed choices. By understanding the pros and cons, assessing your financial situation, and setting realistic expectations, you can create a comfortable and enjoyable retirement experience. Remember, retirement is a personal journey, and the best age to retire depends on your individual circumstances and goals.
Additional Resources:
- SmartAsset: How to Retire at 63: Step-by-Step Plan
- NewRetirement: 10 Reasons Why You Should Actually Retire at 62 (If You Can)
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Late Retirement: Age 70 and Older
Working into your 70s has clear benefits if you enjoy what you do for a living. For all others, a long career may seem like the last thing they would ever desire.
Nevertheless, consider the advantages. You’ll have more time, to start saving more money, for starters. Youll also benefit from the highest possible Social Security payout. Benefits increase proportionately until you reach age 70, at which point they represent 20132% of your total amount if you were born between 201943% and 201954. Furthermore, if you were born in 201960 or later, your benefit would increase by 20124%.
In summary, having a well-thought-out plan will free up more funds for activities you enjoy and reduce your concerns about outliving your assets. And if you maintain your health, you’ll still have a long time to relish retirement’s freedom.
Of course, there are a number of reasons why postponing retirement isn’t always an option. For instance, a 2021 Northwestern Mutual study discovered that the COVID-19 pandemic’s financial effects had altered many Americans’ retirement plans. Approximately 24% of the population plans to retire later than previously anticipated.
At What Age Is Early Retirement?
It is generally accepted that leaving the workforce before the customary age of 65 constitutes early retirement.
As early as age 62, you are eligible to begin receiving Social Security retirement benefits, but your full benefits will not be awarded. For example, full benefits are not payable until age 66 for anyone born between 1943 and 1954, and the full-benefit age is slightly higher for those born after that.
The BEST Retirement Advice EVER From Retirees (7 Examples)
FAQ
How much do you lose if you retire at 63 instead of 67?
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If you start getting benefits at age *
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And you are the: Wage Earner, the Retirement Benefit you will receive is reduced to
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And you are the: Spouse, the Retirement Benefit you will receive is reduced to
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62 + 10 months
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74.2
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34.6
|
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62 + 11 months
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74.6
|
34.8
|
|
63
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75.0
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35.0
|
|
63 + 1 month
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75.4
|
35.2
|
Is 67 a good age to retire?
But if you’re able to wait, your monthly Social Security benefit increases 8% every year you delay between age 62 and 70. Consider using Fidelity’s retirement guidelines to quickly gauge whether you are on track to retire at a given age. To retire at 67, we suggest aiming to save 10 times your final salary.
Is 65 a good age to retire?
Traditionally, 65 has been considered the retirement age, but when and how people retire seems to be changing. “This is not your parents’ or grandparents’ retirement,” says Marilyn Suey, certified financial planner and founder of The Diamond Group Wealth Advisors in San Ramon, California.
What is the retirement age of a 60 year old?
It increases by months for individuals born from 1955 to 1960; for anyone born in 1960 or later, the full retirement age is 67. There could also be tax penalties if you withdraw from certain retirement accounts before age 59 1/2. When you reach age 65, Medicare kicks in for health insurance.
Can you retire at 62?
In some countries, it may be possible to retire at age 62. But in the U.S., it’s a tougher prospect. Many people struggle to save independently for retirement, and gone are the days when the majority of workers were entitled to a generous pension once their careers wrapped up.