Do you know when you will retire? It is hard to know that for sure in these uncertain times, especially if you are at the beginning of your career. After all, who can be confident about what the future will bring? Several different factors can affect when you will enter retirement. Take the quiz we have for you and find out when will you retire!
Retirement refers to that stage of life when a person decides to leave the workforce and live off sources of income or savings that don’t require active work. The age at which one retires, the way they live through their retirement, and the way they fund their lifestyle will vary from person to person.
Retirement and “financial independence” are terms often used interchangeably. Both are achieved when you have enough savings, investment income, or pension income to be able to live off it.
Retirement is a relatively new concept. To our ancestors little more than a century ago, it didn’t even exist. The way it functioned, people worked their entire lives, and when they couldn’t do it anymore, their family was expected to provide for them.
The idea of retirement came to life with increasing life expectancy, the growing popularity of pension plans in some sectors, and the beginning of government-sponsored benefits in 1935 with the creation of Social Security.
In the United States, there is no such thing as mandatory retirement age, but the Social Security Administration has rules around the timing of retirement benefits. Those rules can affect your payout and should factor into your plans.
The common age for retirement is 65 years old, but under current rules, Social Security defines your full retirement age based on your date of birth. It is not the same age for everyone. Generally speaking, retiring before age 60 can be considered early retirement.
How much will your retirement cost? That depends entirely on the age that you plan to retire, your life expectancy, and your projected cost of living during retirement. You can help yourself and save for your retirement in several different ways. Here are some of them:
- employer-sponsored retirement account, such as a 401k;
- government-based or public-employee sponsored fund, like a pension or 457 plan;
- Individual Retirement Account (IRA) – it is a savings account with tax advantages that individuals can open to save and invest in the long term;
- annuities (products that provide a fixed income stream) and 403(b) plans (retirement accounts designed for certain employees of public schools and other tax-exempt organizations);
- Simplified Employee Pension Plan (SEP) – an individual retirement account (IRA) that an employer or a self-employed person can establish;
- non-retirement-specific investment vehicles.
One common rule of thumb suggests setting aside enough money to begin withdrawing 4% of your assets in the first year of retirement, raising that withdrawal each year to cover inflation for the next 30 years. Calculate your projected Social Security benefits, deduct them from your anticipated annual expenses, then divide the result by 4 percent to see how much money you’ll need before you can retire.
Many of these and other types of retirement accounts include benefits such as employer match programs or tax breaks. The idea behind putting money aside to save for retirement is that you could use the specific benefits that each account provides, as well as the time value of money to earn a return on your contributions and grow your earnings over time. The earlier you begin to save, the greater your benefit.
While spending your old age traveling the world or shifting into a comfy lifestyle without needing to work may sound appealing, these retirement models are not for everyone. Indeed, retirement may not be everyone’s cup of tea either due to financial limitations or a desire to continue working.
Consider part-time retirement, where you find work that you like, even if it pays less. Preferably, this work pays enough to cover your living costs while also giving your retirement funds time to grow before you need to use them for income.
Many older people look forward to the day when they can finally retire. Still, fretting about money all the time isn’t the best way to spend your golden years. That is why, rather than focusing on the age at which you are qualified to collect retirement benefits, it is vital to evaluate when you should retire. Before making a decision, ensure that you have the resources to make the most of this new step of the journey of your life.
Are you ready to find out when you can comfortably retire? Get down to the questions and discover your ideal retirement age now! Do you think you can guess it? Pass the link to your buddies so they can find out their perfect retirement time too! Have fun!
How many questions are in the quiz?
There are 20 questions.
What options can you get as a result?
76+, 71-75, 66-70, 60-65, 52-59
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