When it comes to retirement, timing is everything.
If you leave the workforce too early, you could increase the chances of outliving your savings. And if you retire too late, you may find yourself more exposed to age-related health risks with less time to enjoy your golden years.
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According to the 2024 MassMutual Retirement Happiness Study, most American retirees and pre-retirees consider 63 to be the ideal age for retirement [1]. With an average retirement age of 62 — which coincides with the earliest age for claiming Social Security benefits [2] — today’s retirees are coming close to that mark, but future retirees may find it more difficult to retire in their early sixties.
More than a third of pre-retirees (35%) report that their retirement savings are short of where they would need to be to comfortably retire at an ideal age, according to the MassMutual study. Meanwhile, 34% of pre-retirees believe there’s a decent chance they could outlive their savings, with 22% of retirees sharing this concern.
Put simply, retiring at 62 or 63 may be popular, but this age range may not be ideal when you consider all the factors that determine retirement success.
What older Americans need to consider before retirement
If you’re looking to maximize your chances of success in retirement, the age of Social Security eligibility is only the tip of the iceberg. Your financial sustainability, health care and longevity are also things that you should consider before deciding when to retire.
For instance, your Social Security benefits could be roughly 30% lower if you retire at 62 rather than the full retirement age of 67 (depending on when you were born), according to the Social Security Administration [2]. A smaller benefit payout could make a big difference to your retirement lifestyle.
Meanwhile, Medicare eligibility begins at 65 [3], which means you’re likely to face higher private insurance costs if you decide to retire early.
Another factor to consider is longevity. As of 2023, overall life expectancy in the U.S. is 78.4, according to the Centers for Disease Control and Prevention [4]. However, a typical American’s life expectancy can stretch into the 80s and even 90s depending on their gender, date of birth and state, according to the Yale School of Public Health [5].
In other words, if you retire at 62, you may need to ensure that your nest egg is big enough to keep you afloat for up to three decades.
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The retirement sweet spot
When you consider all the data and eligibility requirements, it seems the ideal window for retirement is somewhere between 65 and 67 years old.
Retiring in this age range means you have a few extra years of income to add more savings to your nest egg. You’re also eligible for Medicare — which reduces health care costs — and delaying your retirement a few years gets you closer to full retirement age, when you can claim your full Social Security benefit.
To be clear, retirement planning is never a one-size-fits-all endeavor. It all depends on your situation. For instance, you may have much more in retirement savings than the typical American worker, or you could be facing health issues that compel you to leave the workforce early. In many cases, retiring in your early 60s can be justified.
However, if you’re approaching your 60s with robust savings, relatively good health and some level of financial anxiety, delaying retirement by a few years might be a good idea.
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Article sources
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[1]. MassMutual. “2024 MassMutual Retirement Happiness Study”
[2]. Social Security Administration. “Retirement Benefits”
[3]. Medicare.gov. “Get started with Medicare”
[4]. Centers for Disease Control and Prevention. “Life Expectancy”
[5]. Yale School of Public Health. “Study Reveals Stark Differences in Life Expectancy Across U.S. States Over the Past Century”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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