Throughout our lifetime, we ponder if “the time is right” to make significant life changes. We might wonder when we should get married, switch careers, have  children, and retire. 

But when is the right time to retire? Some people may say 62 is the ideal retirement age. Others will argue that 65 is the best age. And there will always be those who believe that you should retire at the ripe old age of 35, or to continue to work until you are physically unable to work. 

According to a recent Gallup poll, Americans’ retirement age has increased over the past 30 years. In 1991, most retirees retired at the age of 57. Today, that age of retirement (as reported by the already retired) has gone up to 61. Those who are not yet retired are planning a late retirement, as well. In 1995, the most popular age to retire according to pre-retirees was 60, whereas today, that group has increased their planned retirement age to 66. (1) Why? One reason could be that eligible U.S. citizens aren’t able to receive their full Social Security benefit until they are past the age of 65 due to Congress raising that age limit in 1983. Another could be economic and financial strain. 

Determining when to retire depends on the situation. Unforeseen family circumstances and health conditions may force  workers to retire earlier than planned. Other people find themselves in better financial shape than they thought they would be in, and they choose to retire at an earlier age. The key is to begin retirement planning with a financial advisor as early as possible. Here are some key points to consider when deciding if it’s time to retire.

Discover your Social Security full retirement age (FRA)? While the law in the United States currently allows people to begin receiving their Social Security payments between the ages of 62 and72, delaying your distributions will increase your monthly amount. Your monthly payment will differ from your family or friends as it’s not a set amount. Instead, it’s based on the salary you’ve earned during your working career and your age when you begin receiving your benefits. Claiming your benefits earlier than your FRA may reduce your Social Security payments by as much as 30%. On the other hand, delaying your Social Security benefits after your FRA will earn you a higher monthly payment.

Your FRA is determined by the year you were born. For example, if you were born between 1943 and 1954, your FRA is 66. However, if you were born in 1960 or later, your FRA isn’t until you turn 67.

When is the right time to take Social Security? There’s no easy answer. It depends on your financial situation, and life expectancy. For example, if you believe you won’t live past the age of 80, you may want to begin your benefits earlier than your FRA. But if you think you’ll most likely live to a ripe age past 80, you may want to consider delaying your monthly benefit.

Do you have enough money saved? Unfortunately, many people underestimate how much money they will need in retirement. As the saying goes: “nothing in life is certain other than death and taxes”. There will be surprises along the way, including unplanned financial ones. Those surprises make creating a comprehensive retirement plan that includes investments, tax planning, risk management (insurance), and an estate plan imperative. An Osiwala Financial Group advisor can help design a financial plan that considers your retirement goals and dreams along with those unexpected financial hits you will most likely encounter.

Don’t make decisions based on emotions. We’ve all made a decision based on our emotions that didn’t have the best outcome at some point in our life.Some of those consequences may have been financially devastating and left you wishing you would have waited until you could look at the situation in a calmer manner. You have the time to earn money to rectify the problem in your younger years. In retirement, that’s not always possible.

Deciding to retire is a big life decision. But that doesn’t mean it’s always a troublesome decision. We have had many people in our office who are delighted to retire and have zero regrets about their retirement date. We’ve also had many people who are emotionally struggling with the decision of declaring an official retirement date, even if they are financially secure. Regardless of which camp you fall into, it’s important to know that either process is normal. So if you’re emotionally struggling or you are 100% ready to retire with zero concerns, please know you aren’t alone. It’s also normal to have questions, and Osiwala Financial Group is here to help people just like you find those answers.

There’s a lot to consider when it comes to retirement, so what do you have to lose? Would you like to have a “Ask Anything” consultation via the phone or in-office to discuss any retirement topic that concerns you? Osiwala Financial Group Advisors offer these 20-minute, free, no obligation sessions weekly to those in retirement or preparing to retire. To schedule your conversation, click HERE or call us at (248) 828-8000.