Retirement Age Calculator: When Can You Retire

Summary: Retirement age calculators help you determine when you can afford to retire by analyzing your savings, contributions, and retirement goals. This article breaks down how to use the calculator effectively and the key factors affecting one’s ideal retirement timing.

You are nearing retirement age, but not sure the time is right to call it quits at work. How do you know when the time is right? Choosing when to retire is a life-altering, highly personal decision that has financial, emotional and family impact.

There is no perfect age to retire. Every situation is different, but to reduce uncertainty and regret, it is important to plan your retirement age. One way that can help you make an informed decision is to use a retirement age calculator — powerful planning tools that help you assess when you can afford to retire based on your current savings, expected future contributions, and retirement goals.

Understanding retirement age calculators

Here’s how the calculators work. Typically, they consider several key factors:

• Your current age and savings
• Monthly contributions to 401(k) and other retirement accounts
• Expected investment returns
• Desired retirement income
• Social Security benefits¹
• Anticipated retirement expenses.

These calculators check if your retirement plan is on track, and if not, what you should do to change course.

Key factors that determine your retirement age

1. Financial readiness

You might wonder whether you’re saving enough for retirement. Your financial readiness for retirement hinges on having accumulated sufficient assets to support your lifestyle throughout retirement. While financial experts often suggest the “25x rule” (saving 25 times your annual expenses, common in the FIRE movement), your specific needs may vary based on:

• Anticipated lifestyle in retirement
• Expected longevity
• Healthcare requirements
• Desired retirement activities
• Housing costs
• Location-related expenses.

A retirement calculator can show if you’re saving enough.

2. Social Security benefits

Social Security benefits represent a significant income source for many retirees. The age at which you collect these benefits significantly affects your monthly payment amount:

• Early retirement (age 62): Permanently reduced benefits (up to 30% less)
• Full retirement age (66-67, depending on birth year): Complete scheduled benefits
• Delayed retirement (up to age 70): Increased benefits (approximately 8% per year delayed).

Understanding how these Social Security timing decisions affect your monthly income is crucial when determining the right retirement age for you.

3. Health insurance coverage

Healthcare costs represent one of retirement’s most significant expenses. Medicare eligibility typically begins at age 65, creating an important milestone in retirement planning.² Retiring before Medicare is expensive because you’ll need to buy your own health insurance.

4. Personal readiness

Beyond financial considerations, personal readiness encompasses your emotional and psychological preparation for retirement. Consider whether you have:

• Developed interests outside of work
• Built social connections beyond workplace relationships
• Created a retirement vision that excites you
• Prepared for the transition from career identity to a retirement lifestyle.

Using a retirement age calculator

Step 1: Gather your financial information

Before using a retirement age calculator, gather key information, including:

• Current retirement account balances (401(k)s, IRAs, other investments)
• Monthly contribution amounts
• Current annual income
• Expected retirement expenses
• Estimated Social Security benefits
• Pension information (if applicable)
• Expected investment return rates.

The reliability of results depends on the accuracy of the information.

Step 2: Consider different situations

Use the retirement age calculator to explore multiple scenarios by adjusting variables, such as:

• Different retirement ages
• Various retirement saving rates
• Different investment return assumptions
• Various retirement lifestyle costs.

This sensitivity analysis shows how each factor affects when you can retire.

Step 3: Interpret the results

When reviewing calculator results, focus on:

• The projected retirement age based on current savings and contributions
• Any shortfalls between retirement goals and projected outcomes
• The impact of adjusting retirement age by a few years
• The effect of increasing savings rates or adjusting investment strategies.

Step 4: Develop an action plan

Based on the calculator’s insights, you might need to fine tune your retirement planning by:

• Increasing your retirement contributions
• Adjusting your investment strategy
• Working longer
• Reducing planned retirement expenses
• Exploring partial retirement options.

Beyond the calculator: Comprehensive retirement planning

Retirement calculators are helpful, but they’re only part of the retirement planning puzzle. Here are other things you should consider:

• A detailed retirement budget
• Long-term care insurance planning
• Estate planning documents
• A Social Security claiming strategy
• A retirement income distribution plan

Mutual of Omaha’s retirement planning tools, including our retirement savings calculator, can help you create a more detailed roadmap for your retirement journey.

Deciding to retire is a big step with a lot of factors to think about. If you’re unsure where to start, a Mutual of Omaha financial professional is equipped to help you organize these considerations into a cohesive strategy to help you feel confident in your transition to retirement and beyond.

Planning for the unexpected

Retirement calculators usually assume you’ll keep working and the market will do well. However, life often includes unexpected developments, such as:

• Career interruptions
• Health challenges
• Market volatility
• Family caregiving responsibilities
• Inflation fluctuations

Do your best to stay on track with your retirement planning. Build in some wiggle room for your retirement plans. Have some backup plans and keep looking at when you want to retire, because things change.

Taking the next steps

Knowing when you can retire really depends on how much money you have and what you want to do. Those retirement calculators are a good start, but talk to a Mutual of Omaha financial professional for your own plan. Mutual of Omaha stands ready to support you on this journey, offering resources and experience to help you achieve your financial goals.

Frequently Asked Questions

Q1: What happens if I continue working while collecting Social Security?

If you collect Social Security before reaching full retirement age while continuing to work, your benefits may be temporarily reduced if your earnings exceed annual limits. After reaching full retirement age, you can earn unlimited income without affecting your Social Security benefits.

Q2: Can I retire gradually instead of stopping all at once?

Phased retirement—reducing work hours gradually or transitioning to part-time employment—offers advantages, including continued income, prolonged social engagement, and a smoother change to retirement. This makes the financial and emotional changes easier.

Q3: How do I know if I’m emotionally ready to retire?

To be ready for retirement, you need a plan for your life after work, hobbies you enjoy, and social connections outside of work. You can try out retirement activities and lifestyle changes beforehand to see if they suit you.

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

All investing involves risk, including the possible loss of principal, and there can be no assurance that any investment strategy will be successful.

Sources:

1. Social Security, Social Security Administration
2. Welcome to Medicare, Medicare.gov

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