When it comes to calculating your retirement age, there are a lot of factors to take into account. How much money do you have saved up? When do you want to retire? What will your monthly expenses be in retirement?
These are all important questions that need an answer to figure out when you should retire.
In this guide, we will walk you through calculating your retirement age and give you some tips on how to make sure you're on track for a comfortable retirement.
How to Calculate Your Retirement Age
The first step is to figure out how much money you will need to have saved up to retire comfortably. Based on your lifestyle and monthly expenses, this number will be different for everyone.
Once you have an idea of how much money you'll need, you can start to look at when you want to retire. Do you want to retire as soon as possible? Or do you want to work until you're 70?
The next stage is to determine how much money you'll need to save each month to achieve your retirement goal. This number will vary for everyone, depending on how much money you've saved up previously and how many years until retirement.
If you're not on track to reach your retirement goal, don't worry! There are a few things you can do to get back on track:
Increase the amount of money you're saving each month.
Invest in a retirement account that will grow over time.
Work with a Pittsburgh PA financial planner to create a retirement plan tailored specifically for you.
Factors to Consider When Making your Retirement Age Calculation
Calculating your retirement age is a complex process that takes into account many different factors. Some of the factors you can consider before making your final decision include:
How Much You're Currently Earning and Spending
You need to take into account your current income and spending habits when making your retirement age calculation. This will give you an idea of how much money you'll need to have saved up in order to maintain your current lifestyle.
Your Health
Your health is a major factor to consider when trying to calculate your retirement age. If you're in good health, you may be able to retire earlier than someone who is not in as good of shape due to the amount of money needed month-to-month.
On the other hand, if you have a lot of health concerns, you may want to consider delaying retirement so that you can build up your retirement fund even more.
Your Savings and Investments
Your savings and investments are another important factor to consider when calculating your retirement age. If you have a lot of money saved up, you may be able to retire earlier than someone who does not have as much saved.
You want to make sure you have enough money saved up so you can cover your costs and live the lifestyle you want in retirement.
Anticipated Financial Need During Retirement
Another important consideration is your financial needs. You want to make sure you have enough income to cover your fundamental expenses as well as maintain your desired lifestyle, but you also need to take into account the significant risks associated with retirement.
How Much You Will Get in Social Security When You Retire
Your Social Security benefits are another important factor to consider when calculating your retirement age. If you retire early, you will not receive as much money each month from Social Security.
Conversely, if you wait until later to retire, you will get more money per month from Social Security.
You can use the Social Security Administration's Retirement Age Calculator to help you determine when you will be eligible for full benefits.
If all the pieces of your financial plan aren't in place to provide you with enough income without taking on too much risk, you may need to explore a different retirement age.
Conclusion
Figuring out your retirement age can seem daunting, but it's essential to do so if you want to have a comfortable retirement. By following these steps, you will be able to calculate your retirement age and figure out what you need to do to reach it. It is important that you consider many factors that would allow you to make retirement worthwhile. That being said, find out if Pennsylvania is a retirement-friendly state.
Speak with a financial planner to get a more customized estimate based on your specific situation. They can help with various concerns relating to retirement, such as what is a good monthly retirement income.
This material was prepared for The Kelley Financial Group.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.