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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 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. A smaller benefit payout could make a big difference to your retirement lifestyle.
After all, Social Security has long been the safety net millions of retirees count on — with roughly 16.4 million people depending on the paycheck completely in 2022, according to data from the Pew Research Center (3).
But concerns are mounting that the system’s trust fund could start running dry as early as 2033.
According to the latest Social Security Trustees report, the program will only be able to cover about 80% of scheduled benefits after 2034. And things might get worse sooner than expected.
Karen Glenn, the Social Security Administration’s chief actuary, recently warned that the old-age and survivors insurance (OASI) trust fund could be depleted by late 2032 due to the impact of the recently passed One Big Beautiful Bill Act (OBBBA) — even earlier than the previous projection of the first quarter of 2033 (4).
Meanwhile, Medicare eligibility begins at 65 (5), 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 (6). 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 (7).
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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Other ways to save for retirement
Before you start exploring new ways to boost your retirement savings, it’s important to figure out where you stand. Knowing how much you’ll actually need in retirement is half the battle. Even if you’ve built a solid nest egg, it’s smart to check whether your savings will stretch as far as you think.
A financial advisor can help crunch the numbers and build a plan that works.
But hiring an advisor can be a lifelong commitment, which might make or break your retirement. That’s why finding reliable advisors is crucial.
That’s where Advisor.com can come in. The platform connects you with an expert near you for free.
Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.
Just enter a few details about your finances and goals, and Advisor.com’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.
Finding the right advisor isn’t always easy — there’s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation with no obligation to hire to see if they’re the right fit for you.
Once you’ve got the right financial advisor in your corner, the next step is getting a clear picture of where your money’s actually going. That starts with the basics — budgeting and tracking your spending.
If managing a budget feels overwhelming to you, apps like Rocket Money can simplify the process.
Rocket Money tracks and categorizes your expenses, providing a clear view of your cash, credit, and investments in one place. It can even uncover forgotten subscriptions, helping you cut unnecessary costs and save potentially hundreds annually.
For a small fee, the app can also negotiate lower rates on your monthly bills, making it a valuable tool for keeping your finances on track.
Once you’ve nailed down your budget and know where your money’s going, the next step is making sure you have a safety cushion in place.
Without a steady paycheck, setting up an emergency fund to meet any unforeseen expenses is crucial. Experts usually recommend keeping six to 12 months’ worth of expenses as emergency savings. That way, you don’t have to worry about going into debt in the event of a medical emergency or an expensive leaky roof repair.
You can make your idle cash work harder for you by opting for a high-yield, liquid account. That way, your emergency fund can generate some cash while still being easy to access when you need it.
For example, a Wealthfront Cash Account can provide a base variable APY of 3.50%, but new clients can get a 0.65% boost over their first three months for a total APY of 4.15% on their emergency savings. That’s over nine times the national deposit savings rate, according to the FDIC’s October report.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, you can ensure your funds remain accessible at all times. Plus, balances of up to $8 million are insured by the FDIC through program banks.
Wealthfront also offers joint cash accounts, which can help couples or families manage their finances all in one place.
But sometimes life throws curveballs that your emergency fund might not be able to cover. Rather than high-interest personal loans or maxing out your credit cards, you could instead consider tapping into your home’s equity.
Because HELOC rates are usually lower than credit card or personal loan APRs, it might be a cost-effective way to borrow against your home’s value.
You can tap into a credit line of up to $350,000 and access your full funds right at closing with a Home Equity Line of Credit (HELOC) from AmeriSave.
You can choose a draw period that fits your life — three, five, or 10 years — along with 20- or 30-year terms to suit your budget. And with a 10-year interest-only option, you can keep monthly payments manageable while you plan ahead.
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. Plus, 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 solid idea.
What to read next
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
MassMutual (1); SSA (2); Pew Research Center (3); American Society of Pension Professionals & Actuaries (4); Medicare.gov (5); Centers for Disease Control and Prevention (6); Yale School of Public Health (7)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.