Have you ever wondered why age 65 is considered the “normal retirement age”? What if you plan to retire earlier or later, or phase out of the workforce? Here’s how to time it just right.
Age 65 has long been considered the typical retirement age, but Americans have different thoughts on when to retire.
The 2023 Financial Well-Being Index℠ indicates that each generation expects to retire at an earlier age than the last. And more and more people are thinking of retirement differently: showing interest in gradually decreasing their working hours as opposed to retiring all at once.
The Silent Generation
Born 1928–1945
Traditional retirement was much more common for people currently over age 75.
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Born 1946–1964
Typically plan to immediately go from working full time to retirement— around age 68.
Gen Xers and Millennials
Born 1965–1980, 1981–1996
Desire a phased approach, gradually decreasing their hours—starting around ages 64 and 59, respectively.
Gen Zers
Born 1997–2012
Expect to immediately go from working full time to retirement—around age 55.
Finding the retirement age that’s right for you
Of course, you won’t be able to find your ideal retirement age in any of the charts above. It’s a personal decision built on answers to some big questions. For starters:
- How much will you have in savings at your target retirement age? How does that number change if you give or take a few years?
- How much money do you need or want in your bank account each month in retirement? This may be informed by your spending and saving habits today, or you may have different needs in retirement.
- Do you plan to have continued income from a part-time job or phased retirement?
- What does longevity look like in your family? People are living longer in retirement today than any other time in history, so understanding how long your assets will realistically last is critical to any successful plan.
It’s a lot, we know. Our can help you visualize how your savings would play out at any chosen retirement age. Or if you’re looking for more support, a financial professional can help you navigate what makes sense for you.
How to avoid outliving your money
No matter when you hope to retire, there are ways to help avoid outliving your money.
- Save more now. Contribute the maximum amount allowed by the IRS to your employer’s retirement plan and to any individual retirement account (IRA). If you’re age 50 or older, you may be able to make catch-up contributions, too.
- Plan to wait a little longer to collect Social Security benefits. For every year you wait past your full retirement age to elect benefits, you can receive more. Your monthly benefit can increase by about 8% per year, up to age 70.
- Plan to limit your retirement spending. Many financial professionals recommend that you tap no more than 4–5% (adjusted annually for inflation) of your nest egg each year, to help make your money last longer.
What’s next?
Setting and working toward a target retirement age isn’t easy, but we’re here for you. If you’d like to dive into the details with a financial professional, we’ll help you find one.
