When you’re a kid, you spend a lot of time thinking about what you’re going to do when you get older. You dream about where you’ll go, what you’ll do, who you’ll be with. It feels so far away, it almost doesn’t seem real.
And then one day, you look around and realize you grew up.
As an adult, retirement can feel that same way. It’s one of those things you’re told is going to happen, but it’s so far off. In the meantime, you’re preoccupied with so many adult responsibilities, it’s easy to not even think about it.
But you should be thinking about it and planning for it.
When it comes to retirement planning, one of the first things you should do is decide when you’re going to retire. This establishes a timeline for your future. It lets you know how long you have to accomplish certain goals and meet savings requirements.
So, when should you retire?
There’s no law set for retirement. Technically speaking, you’re free to retire whenever you want. However, you still need the means to live out the rest of your life. This is where things get tricky.
The earliest you can collect Social Security is 62. Most people have to wait till 65 before they quality for Medicare. This is a big reason why the average retirement age is between 62 and 65.
While these programs help with retirement, they’re not enough to live off of. Plus, some people want to retire earlier than that.
If you have a 401k, you may be able to start drawing from it as early as 55. You’ll want to check with your company for general rules and potential penalties.
The earlier you choose to retire, the more savings and assets you’ll need built up. You will also need to be very cautious of your living expenses. One never knows how long they will live, which makes early retirements difficult to plan.
Those who retire early are often earning money from residuals, on-going royalties, interest from trust funds or larger savings, generous pensions, etc. If you’re set on retiring early, the best plan is to create a revenue stream that continues to feed you money even after you’re done working.
Deciding what to do with retirement
When deciding your retirement age, it helps to think of what you’ll do with retirement. Some find the idea of retirement to be boring and plan to work in some capacity for as long as they’re able to. Others might like the idea of being able to travel more or spend their days visiting family and friends.
That’s something your age could impair you from doing, and so, it may be best to focus on retiring sooner rather than later.
A plan can help you determine retirement age
Everyone should have a retirement plan in place. Far too many people enter retirement age only to discover they are financially incapable of retiring. Even if you’re planning on retiring late in life, you should start planning as early as possible.
The earlier you start thinking about retirement, the simpler it becomes.
Whatever age you’re planning on retiring at, we can help you create a plan to get you there. For retirement planning in Springfield, Ohio, contact KB&P Partners today!