When Can I Retire?

“We gotta get out of this place, if it’s the last thing we ever do.”

“When can I retire? Life is short and I don’t want to work until the day I die.” I’ve had conversations with several individuals the past couple of weeks about their desire to stop working. Each person has said they are tired – they’ve been working for 35 to 45 years, their jobs keep them busy and they regularly work over 50 hours a week. They are at a point in their careers where they have achieved what they wanted and now want to enjoy the fruits of their labors. However, they are not at full retirement age (67) for social security benefits and are, understandably, a bit nervous about burning through their retirement savings, so what do they do?

Disclaimer: I am not a financial advisor, and I am not providing any guidance on investing for your retirement. Rather, I am responding to those people who are between 55 and 63 years old, within a few years of retirement age, and have little to no emotional and mental energy left to work. Let’s start by asking a few questions:

  1. What is your time frame? Are you looking to retire in 2 years, 5 years, something else?
  2. Can you slowly ease off, perhaps cut back to 20 hours a week for a while before stopping work completely?
  3. Do you have an affordable health insurance plan, or do you need to cover the full cost of coverage?
  4. What will retirement look like? Will you work at another job – maybe a position that allows you to share one of your passions; e.g., a hardware store for someone who likes DIY projects or a museum tour guide for an individual who loves art and exhibits? Or, maybe you want to spend more time on a nonprofit board? Perhaps you want to travel?

The answers to these questions will help determine how much money you will need to live on. For example, the longer you are receiving a regular paycheck, the greater your retirement savings can grow. By thinking through these questions, you can decide what you are willing to do to increase your savings or change your lifestyle so you spend less today.

Of course, in order to retire, we DO want to ensure that we have financial stability. How do you know you have enough and what do you do to stretch it out? There are many tools available to help determine how much money you will need – Nerdwallet and Charles Schwab are a couple of sites with retirement calculators. These tools will also allow you to play with the assumptions which will help you make choices about how much money you may need. If you want to retire at age 62 and you don’t have enough money according to the retirement calculators, you still have some options:

  • Consider working part-time. Even 10 hours a week can help supplement your income.
  • Although full retirement age is 67 for folks born 1960 or later, you can begin receiving social security benefits as early as age 62. This amount may help pay for health insurance, which would greatly relieve that anxiety.
  • You can start withdrawing from your IRA at age 59 1/2.
  • Additionally, many people earn a living with side gigs: Uber driving, mowing lawns, plowing driveways, detailing cars, etc.
  • You can make changes to your current lifestyle which would reduce your current spending and allow you to significantly increase the amount you put into savings.

You may think you can’t retire yet; however, by reviewing your options and playing with the numbers (yes, “playing” because you can have fun with numbers), you might find that you can leave your soul-sucking job sooner than you thought. At a minimum, you will have a better understanding of steps you can take today to retire comfortably. Knowledge is power.

“Girl, there’s a better life for me and you.” The Animals