The timing of your target retirement date will result from several different factors that you will consider over time. One of the most important is your spouse (and their career, if they work). Some couples prefer to retire at the same time, so that they can enjoy travel and leisure activities together. In other circumstances, it makes sense to stagger your retirement dates, for several important reasons.
Consider your healthcare. If you will be relying upon Medicare to provide for your healthcare in retirement, then both you and your spouse might wish to wait until age 65 to retire. On the other hand, some employers do offer healthcare benefits to retirees (and their spouses). Investigate those plans carefully, to be sure the coverage is equivalent to your needs, and consider the impact of premiums on your budget.
Plan for Social Security. The earliest age at which you can claim Social Security benefits is 62. But because you’re claiming them “early”, before your full retirement age (66 or 67, depending upon when you were born) your benefits will be permanently reduced.
On the other hand, you can also delay your claim and increase your benefits check by 8 percent for each year that you wait (up until age 70).
Your spouse faces the same rules, of course. But you will both have to decide whether your own benefits or spousal benefits are the better option for you. All of these decisions will come together, to create the full picture of your Social Security benefits.
A gradual transition can be easier. When one of you retires before the other, you can transition gradually and adjust to your new income and lifestyle. This can be a smart move for those who feel uncertain of their comfort with a new budget, or for those who wish to finish paying off debts before fully retiring.
Evaluate retirement income. Of course, the most important consideration is your expected retirement income. Most people, married or not, hope to retire when their income allows for a reasonably comfortable lifestyle. One of you might decide to keep working a bit longer, either to build up more savings, pay down debts, increase Social Security benefits, or some combination of these factors.
We can help with that part. Call us to schedule an appointment, and we can help you calculate your retirement income from all potential sources. Then, we can help you and your spouse decide upon the right time to take the leap.