Is Retiring at 65 a Big Mistake? Here’s What You Need to Consider

Retiring at 65 is no longer a given. According to the Pew Research Center, about 1 in 5 (19%) Americans aged 65 and older were employed in 2023, nearly double the proportion 35 years earlier. And while Gallup found that the average retirement age in the United States in 2022 was 61, the average expected retirement age among non-retirees was 66, up from 60 in 1995.

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In the United States, age 65 has long been considered the ideal time to end a career. After all, that’s when Medicare eligibility begins. However, retiring at 65 may not be a good idea for several reasons.

The problem of retiring at 65

You could argue that retiring at 65 is like quitting work too early. For one thing, you don’t get your full monthly Social Security benefits until your full retirement age, which is 67 if you were born in 1960 or later. If you sign up for Social Security at 65, you risk a permanent reduction in those monthly checks.

Additionally, with life expectancy increasing, retiring at 65 could mean your savings will last longer than expected, depending on your health and family history. This could put a lot of pressure on your savings. Continuing to work increases your savings potential.

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There is also a downside. While 65 may be too young for some people to retire, it may be too late for others, especially those in poor health.

You may not want to work until 65 if your health declines in your late 50s. Working longer could mean less time to enjoy retirement, so there’s a huge balance to strike.

Factors to Consider When Choosing Your Retirement Age

Determining the ideal age to retire isn’t easy, and it’s often best to keep your plans flexible in case they need to change. But in general, you’ll want to consider the following factors in your decision:

Your health:If your health is good as you progress in your career, you may be able to plan for later retirement.
Family History:If your family has a history of longevity, you might consider retiring later.
Savings level:Retirement can be stressful when you don’t have enough money to maintain the lifestyle you’re used to. Limited savings could easily justify a later retirement.
What you think about work:If you have enough savings and can afford to retire early, it might give you an escape from a stressful job you dread. But if you love what you do, it’s easy to make the case for working longer.

Consider the pros and cons before deciding when to retire. It also doesn’t hurt to meet with a financial advisor to discuss your options. They may be able to help you target an age that will allow you to fully enjoy your retirement without the risk of running out of money.

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This article is provided for informational purposes only and should not be construed as advice. It is provided without warranty of any kind.