Waiting until age 70 to retire isn't for everyone. Could you
be waiting too long to quit the 9-to-5 grind?
Emmet Pierce
• May 19, 2019
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Some
people view retirement as something to that should be delayed as long as
possible. They say that, for many older workers, waiting as long as possible to
collect Social Security benefits is the prudent
choice.
Important
as this advice is for many of us, it may not apply to you. If you are
financially prepared, there are good reasons to consider retiring at the
traditional age of 65, or maybe even sooner.
“Time
is the most valuable asset anyone can ever have,” Mike Kern, a certified
public accountant based in South Carolina, tells Money Talks News. “I would
encourage anyone who has the ability and wants to retire early to do so.”
There
is plenty to see, do and learn in retirement. Many retirees go on to pursue new
careers or fulfill lifetime goals they didn’t have time for when they were
working. Freed from the burden of a 9-to-5 job, they find that life has many
new possibilities.
What
follows are powerful reasons not to delay your retirement.
1. Delaying Social Security may not be right for you
Before
deciding, consider your personal circumstances, advises Money Talks News
founder Stacy Johnson:
“For
some people it’s a great idea to take Social Security early, and for some
people it’s a great idea to wait.”
You
generally can start receiving Social Security as soon as age 62 or as late as
age 70. If you plan to continue working until your benefits reach their maximum
at age 70, delaying your claim will result in greater monthly
payouts. However, if you have concerns about your longevity or you
need the money right away, filing an early claim may make the most sense.
Good to
know: The system is actuarially
neutral, designed to make your overall benefits work out
approximately the same over the course of your retirement, no matter when you
first claim them. Delaying your first claim increases your monthly
retirement benefit, but it may not affect the total amount you receive
over a lifetime.
2. Retirement can lower your housing costs
When
you retire, you no longer need to live close to a job. Where you decide to live
in retirement can affect your quality of life, due in part to the price of real
estate and rental homes.
“Your
house is typically the biggest expense in your budget,” says Kern. “Oftentimes,
the best way to considerably decrease your costs is by downsizing or moving to
a cheaper place.”
Smaller
towns generally have less expensive housing than large metropolitan areas. For
example, the late April median home value in Boise, Idaho, a community of about
236,000
residents, was $298,700,
according to Zillow. The median monthly rental cost there was $1,395, Zillow
says.
Compare
that to, for an extreme example, San Francisco — population 883,000:
Zillow says Frisco’s median home value is $1,353,500.
The median rental cost is $4,500.
3. Your good health may not last
Nobody
lives forever. If you don’t get started on your post-retirement goals in a
timely manner, you may never reach them.
“As
grim as it sounds, if your health is on the decline, then it may make sense to
take an early retirement in order to maximize the net payout of your lifetime,”
says attorney Jacob Dayan,
CEO of Chicago tax services company Community Tax.
Consider,
too, that you may experience health problems as you age. If your retirement
goals require being in good physical shape so you can hike the Inca Trail in
Peru or bicycle through Ireland, it makes sense to retire sooner.
4. You want to start a new career
Retiring
allows you to pursue your true passions. Some retirees use their savings and
pension benefits to finance the start of another career.
You
can’t claim Social Security retirement benefits until age 62, but if you’ve
invested in a retirement plan or qualify for a pension, you may be able to use
part of those funds to launch a new career.
Dayan
advises careful planning and consideration before making a change. If retiring
early and starting a new career requires a substantial financial investment,
consider all the risks, including tapping retirement funds. Make sure the
switch won’t put you in financial distress.
5. You can afford to do it
Money
doesn’t buy happiness but, with careful planning, an adequate retirement
account may allow you to quit your job. If you no longer feel fulfilled at work
and can afford it, it may be time to make the transition. A few things to
consider:
- When
you’re starting out in your career, it’s easy to become obsessed with
getting ahead. At some point, though, you reach your goal. You deserve a
reward for your hard work.
- If
you have loved ones who need your help and you can afford to stop working,
retiring frees you to help them with their day-to-day activities.
- Retirement
offers you time to grow, to cultivate new interests, pursue hobbies and
spend time with loved ones. It frees you to do the things that matter
most.
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