When Can I Retire? How to Know If You’re Financially Ready

Reviewed by: Mark Zagurski, CLU®, ChFC®, CMFC® and CRPC®

Summary: Retirement doesn’t begin at a single universal age. While milestones like age 62 or full retirement age often shape retirement conversations, the real question is whether your income, savings and lifestyle goals are ready to support life after work. Understanding the financial milestones that affect retirement timing can help you decide when retirement may realistically fit into your long-term plan.

Key takeaways

• There is no single “correct” retirement age; readiness depends on income, savings and lifestyle goals.
• Social Security benefits can begin at age 62, but claiming early reduces monthly payments.
• Full retirement age (typically around 66–67) provides 100% of your Social Security benefit.
• Waiting until age 70 increases your Social Security income.
• Most retirees rely on multiple income streams rather than a single source.
• Retirement planning focuses on sustainable income, not just savings totals.

What age can you retire?

In theory, you can retire at any age if you have enough financial resources to support yourself. In reality, retirement decisions are influenced by several factors:

• Access to retirement savings
• Social Security eligibility
• Healthcare coverage
• Personal financial readiness

Mark Zagurski, Mutual of Omaha Advisors Director of Strategy and Operations and host of the Make it Personal Podcast adds, “Ultimately, it’s your choice, and you should make an informed decision based on your personal situation.”

If you want a more personalized estimate, a retirement age calculator can always help you explore how your savings, contributions and retirement goals may affect your potential retirement timeline.

Retirement age milestones that may affect retirement timing

Although retirement readiness varies for everyone, several common age milestones affect financial planning.

Age 59½: Access to retirement accounts

At age 59½, many retirement accounts such as 401(k)s and traditional IRAs can generally be accessed without early withdrawal penalties.

This milestone gives some individuals flexibility to retire earlier, although drawing from retirement savings too soon can affect long-term income.

Age 62: Earliest age to begin Social Security benefits

Age 62 is the earliest most Americans can begin receiving Social Security retirement benefits. Starting benefits earlier provides income sooner but permanently reduces the monthly benefit amount compared with waiting until full retirement age.

For many people, the decision to claim early is influenced by uncertainty about the future. Mutual of Omaha Advisors national sales director Nate Hobson explains, “One of the biggest fears that people have in retirement isn’t, ‘Do I have enough money to retire?’ it’s, ‘Will I outlive my money?’”

Age 65: Medicare eligibility and healthcare coverage

Most Americans become eligible for Medicare at age 65, making it an important milestone in retirement planning. For many people, access to Medicare can influence when retirement feels more financially manageable, especially for those who previously relied on employer-sponsored health coverage.

Retiring before age 65 may require exploring alternative coverage options, such as COBRA, a spouse’s plan, individual health insurance, or income-based subsidies available through the healthcare marketplace. These options can vary in cost and coverage, which may affect overall retirement timing decisions.

Even after enrolling in Medicare, healthcare expenses can differ based on individual needs. Some retirees review additional coverage options to help manage out-of-pocket costs, depending on their situation.

Full retirement age for Social Security

Your full retirement age (FRA) is when you become eligible to receive 100% of your Social Security benefit.

For many people today, FRA falls between 66 and 67, depending on birth year.

Some retirees view this age as a natural transition point between work and retirement because it avoids early benefit reductions while still providing income sooner than waiting until age 70.

Age 70: Maximum Social Security benefit

Delaying Social Security beyond full retirement age increases your monthly benefit each year until age 70.

“Each year you delay beyond full retirement age increases your monthly benefit,” Zagurski explains.

For individuals who have other income sources and expect a longer retirement, delaying benefits may increase long-term income security.

If you are considering claiming benefits soon, you may want to review when to apply for Social Security benefits, to understand timing and steps involved to maximize your benefits.

When do most people retire?

Retirement timing varies widely and often depends on health, financial readiness, and life circumstances.

According to a Mutual of Omaha Retirement Study, 71% of retirees reported retiring between ages 60 and 70. *

However, retirement doesn’t always happen according to plan, as 53% of retirees said they retired earlier than they expected. * Unexpected health issues, job changes, or family caregiving responsibilities can shift retirement timelines for many households.

Common sources of retirement income

“Wealth may get you to retirement, but income is what gets you through it,” says Zagurski. That shift in focus helps explain why 65% of retirees and 68% of people nearing retirement expect to depend on three or more income sources in retirement.*

Common retirement income sources include:

• Social Security benefits
• Retirement accounts such as 401(k)s or IRAs
• Personal savings or investment income
• Pension income (for some workers)

For many retirees, combining several income sources can help create more stability and flexibility throughout retirement.

How do you know if you are ready to retire?

Age milestones alone don’t determine retirement readiness. Many people evaluate three key factors when deciding whether they can retire.

1) Reliable retirement income

One of the most important retirement questions is whether your income sources can support your lifestyle over time.

A common rule of thumb suggests retirees may need about 80% of their pre-retirement income to maintain a similar lifestyle. However, spending needs vary widely depending on housing costs, health care needs and personal goals. Basing your retirement income needs on your expected expenses, not your pre‑retirement income, gives a more accurate view of how much money you’ll need.

Zagurski emphasizes the importance of tailoring the plan:

“Determining your actual expenses rather than relying on a general rule of thumb is critical when creating a plan that fits your situation.”

2) Sustainable savings

Another major consideration is whether your savings will last throughout retirement. Many retirees worry about unexpected expenses and the possibility of outliving their savings.

Because retirement may last 20 to 30 years or longer, building a plan for sustainable withdrawals is essential.

3) Personal lifestyle goals

Retirement planning is not purely financial. Personal priorities often play an important role.

Many people consider factors such as:

• Health and longevity
• Family responsibilities
• Travel or lifestyle goals
• Work satisfaction or burnout
• Caregiving responsibilities

Mutual of Omaha Financial Advisor and Certified Financial Planner (CFP®) Adam Olson explains it this way:

“Personal finance is more personal than it is finance. A successful plan combines the numbers with your individual needs and how you want your money to add value to your life.”

For many individuals, retirement becomes less about reaching a specific age and more about aligning finances with lifestyle goals.

Common mistakes when deciding when to retire

Assuming retirement happens at a fixed age:

Many people assume retirement must happen at a specific age, but financial readiness matters far more.

Claiming Social Security without understanding the long-term impact:

The age you start receiving Social Security affects your monthly income for life. “The benefit amount you first receive sets the base for the amount you’ll receive for the rest of your life,” Zagurski explains.

Focusing only on savings instead of income:

Saving for retirement is important, but planning how those savings will generate income is just as critical. “Assets may get you to retirement,” Zagurski says, “but income is what gets you through it.”

Building a retirement plan that works for you

Retirement planning today is more complex than it was for previous generations.

“With longer life expectancies, rising healthcare costs and the decline of traditional pensions, retirement planning has become much more complex,” Zagurski explains.

Working with a financial professional can help clarify options and create a strategy aligned with your long-term goals. With a thoughtful plan, retirement becomes less about guessing the right age and more about building the confidence that your finances are ready for the next chapter.

How long will your savings last in retirement?

Planning when to retire is only part of the equation. Understanding how long your savings and income may need to last can help you build a more confident retirement plan. Not sure how long your money will last in retirement?  Use our calculator to see how you’re tracking.

How long will my money last?

Frequently asked questions about retiring

Can I retire at 55 and collect Social Security?

In most cases, age 62 is the earliest you can begin receiving Social Security retirement benefits. Retiring at 55 may be possible if you have other income sources or savings, but you generally would need to wait until 62 to claim Social Security.

How much money will I lose if I retire at 62 instead of 65?

If you claim Social Security at 62, your monthly benefit will generally be lower than if you wait until 65 or full retirement age. The exact reduction depends on your birth year and your full retirement age. Because the reduction is permanent, it’s important to understand how claiming early may affect your long-term income.

What is the $1,000-a-month rule for retirement?

The $1,000-a-month rule is a general shortcut some people use to estimate how much savings may be needed to generate a certain level of monthly retirement income. For example, for every $1,000 of monthly income you want in retirement, you’ll need roughly $240,000-$300,000 saved.  This is based on the 4% rule, which suggests you can withdraw about 4% of your savings per year (adjusted for inflation).

However, this is very simplified and only a rough guideline and does not account for factors like Social Security, taxes, investment returns, inflation, or how long retirement may last. A more useful approach is to build a retirement income plan based on your actual expenses and goals.

Can you legally retire at any age?

Yes. There is generally no legal retirement age for most workers, which means you can stop working whenever you choose. The bigger question is whether you have enough income, savings, and health care coverage to support your life once you retire.

What is the average retirement age in the United States?

People retire at different ages depending on their financial situation and personal goals. However, many Americans retire in their early to mid-60s, often around the time they become eligible for Social Security or Medicare.

Is $5,000 a month enough to retire on?

It depends on your lifestyle, housing costs, health care needs, taxes, and where you live. For some households, $5,000 a month may be enough. For others, it may not cover essential and discretionary expenses. The best way to evaluate this is to compare your expected retirement income with your projected monthly spending.

How do you know when you’re ready to retire?

You may be ready to retire when you have a clear picture of your expected income, your savings strategy, your health care needs, and your long-term spending goals. Retirement readiness is less about reaching one specific age and more about knowing whether your finances can support the life you want after work.

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Reviewed by: Mark Zagurski, CLU®, ChFC®, CMFC® and CRPC®

Mark is Mutual of Omaha Advisors’ Director of Strategy & Communications. With more than 30 years of experience, he has worked extensively in advisor development, strategy, and communications, focusing on helping advisors and their clients make informed financial decisions. He is also the host of the Mutual of Omaha Advisors podcast, “Make it Personal,” which explores personal finance and strategies to help you take control of your money and future.

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Sources:

*Mutual of Omaha worked with research vendor, quantilope, to conduct research related to Decumulation – the strategic drawdown of assets during retirement years. This research had a sample size of 496 respondents aged 50+ who were already retired (n=327) or nearing retirement (n=169) within the next 10 years. Respondents who stated they did not have at least some assets to draw down during retirement were excluded from the survey. The research was conducted in a 10-minute online survey from October 6-15, 2025. All data included in this report are based on Mutual of Omaha proprietary research unless otherwise noted.

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 Advisors is a division of Mutual of Omaha Insurance Company.

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

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.

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