You may be in good company if you’re planning to retire before age 65. According to research from Transamerica’s Center for Retirement Studies, the median retirement age in the United States is 62. Further, almost six in 10 retirees retired sooner than planned.
For You: 10 Steps To Prepare For Retirement
Explore More: 3 Things Retirees Should Sell To Build Their Retirement Savings
Of course, leaving the workforce early can have a big impact on your finances and the future of your money. Here’s a look at some ways you can plan ahead for retirement by age 65.
Reasons To Retire
For the 58% of retirees who retired sooner than planned, almost half made the decision for personal health-related reasons. More than 40% did so for employment-related issues, while 20% left for family reasons. Only 21% retired early because they were financially able.
“The findings underscore the fragility of retirement in the U.S., with older Americans often finding themselves retired before they’re financially ready to call it quits,” according to CBS News. “And with many people outliving earlier generations — the typical respondent told Transamerica they believe they’ll live to age 90 — they’re also facing the prospect of supporting themselves financially for several decades in retirement, which can easily stretch or even exhaust their savings.”
Read Next: 5 Cities You Need To Consider If You’re Retiring in 2025
Impact on Social Security
One of the first things to consider if you’re looking to retire early is the impact on Social Security. You’ll likely receive more from Social Security if you hold off on retiring. Even if you can file as early as age 62, you may see a 30% reduction in your monthly check compared with waiting until full retirement age.
One possible way to help with this situation is if you’re married and can work it out with your spouse. Perhaps one of you can claim earlier and the other can continue working.
Retirement Plans
Your first step toward retiring early may be to solidify your retirement plan. Per Charles Schwab, you might want to look at factors such as your expected date for retirement, expected future expenses, potential income sources and how much you have in savings.
Additionally, you can use a retirement calculator to see where you stand. You may also consider checking your retirement investment portfolio at least once a year.
Retirement Savings
When it comes to savings, you might want to see about boosting the amount you have in your emergency fund and overall savings. For example, consider if you’re putting enough into your employer-sponsored accounts. You might also look at your Health Savings Account and regular brokerage account.
Healthcare Expenses
When it comes to retiring early, you need to consider healthcare costs. What will you do until Medicare kicks in? You can start researching options through the Health Insurance Marketplace, insurance from your employer’s company, employer retiree insurance or even faith-based healthcare ministry options.
If you’re thinking about getting a part-time job to help with more income, it might also assist you with healthcare costs. Some employers offer healthcare benefits to part-time employees. If not, you could still get a part-time position to bring in extra money, or use this time to turn a hobby into a side gig.
More From GOBankingRates
- 7 Winter Clothing Items You Should Buy at Costco Now
- 5 2025 SUVs the Middle Class Should Consider Buying
- 25 Places To Buy a Home If You Want It To Gain Value
- How Far $750K Plus Social Security Goes in Retirement in Every US Region
This article originally appeared on GOBankingRates.com: Why You’ll Likely Retire Before 65 — and What To Consider While Planning Ahead
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
