Family Feud – At What Age are you Supposed to Retire?
The goal on Family Feud is to give the most popular answer to survey questions to win the game and cash prizes. And the survey says: 65.
Retiring in you 60’s is a new phenomenon. Until the mid 20th century, most people worked until they died or became physically unable to work. Today, 65 year olds are healthier and have a much longer and forward looking lifespan than ever before. At 65, the average worker has an additional 30 years of living.
Before you make a retirement decision based on what you think the most popular answer is, look at your unique circumstances and evaluate your choices.
Today, the individual is responsible for financially preparing for their retirement, so that’s one circumstance to evaluate. Have you prepared for 30 some odd years of supporting your lifestyle with your retirement income and savings?
Most people determine the amount they will spend in retirement based on what they spend before retirement. A common calculation is to estimate retirement spending at 80% of pre-retirement income. You have choices – you can retire to a less expensive location or living arrangement and you can evaluate how you want to spend your time and what discretionary expenses are a priority to you.
Retirement transition today is much different from the retirement transition in the past at the popular age of 65, where you work one day, have a retirement party the next day and never work again. Today most retirees transition into retirement by going part time or finding a retirement job.
At retirement, most people are used to years of regularly saving and investing. They have disciplined themselves to not raid their savings for current spending. Retirement is the time to spend your savings. That is a huge mindset change for many people, to withdraw from their savings and eventually see the balance go down. There are proven strategies to calculate what you can spend in the early years of retirement and still invest for your future, long-term needs.
Before you retire, make sure you have the long-term perspective of your spending needs and the funding sources. Just like for a physically healthy life, you need annual checkups by doctors, you also need annual financial checkups to keep your finances healthy for all your future years of physical health.
What is the most popular answer to the question, What are you Supposed to do before retiring? The most prudent answer is to consult a wealth manager, an accountant and an estate attorney.
We hope you win the game and the cash prizes in retirement.