Majority of Americans Aged 40 and Above Consider 63 as the Optimal Retirement Age, Yet Beware of These 3 Downsides of Retiring Early at 63

Majority of Americans Aged 40 and Above Consider 63 as the Optimal Retirement Age, Yet Beware of These 3 Downsides of Retiring Early at 63

There is no official retirement age in the United States. You can decide to end your career at 60. Or, you can continue working until age 75.

However, it is quite common for people to retire before their 60s. And a recent MassMutual investigation of respondents aged 40 and over believe that on average, 63 is the ideal age to retire, according to both retirees and pre-retirees.

You might like the idea of ​​ending your career at 63. At this point, you may be young enough to have the energy to travel and pursue different activities, but you also won’t leave the workforce at an unreasonably young age. But while retiring at 63 may seem appealing, here are some pitfalls you might encounter.

Majority of Americans Aged 40 and Above Consider 63 as the Optimal Retirement Age, Yet Beware of These 3 Downsides of Retiring Early at 63

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1. You are not yet eligible for Medicare

Anyone who has ever had to pay for health insurance entirely out of pocket can tell you how expensive it can be. If you retire at age 63 and lose your health coverage, it will be another two years before you are eligible for Health Insurance.

That could mean spending two years covering the cost of expensive premiums. And it could also mean not being able to take full advantage of those two years because your retirement income is all eaten up.

2. You are not eligible for your full monthly Social Security benefit

You are allowed to submit a request Social Security from 62 years old. So, if you retire at age 63, it is possible to claim benefits at the same time.

However, you are not entitled to your full monthly Social Security benefit based on your personal earnings history until you reach full retirement age. This age is 66, 67, or somewhere in between, depending on the year you were born.

Now, if your full retirement age is 67 and you sign up for Social Security at 63, you’ll reduce your monthly benefit by about 25% – for life. And while it’s certainly possible to retire without paying into Social Security, for some people the only way to make losing their wages from employment work is to use these benefits instead.

3. Your savings may need to last longer

If you have a family history of longevity, then it is conceivable that you could end up living into your 90s. But that could pose a challenge when it comes to preserving your savings.

Even if you have a decent 401(k) or IRA balance, if you retire at 63 and end up living to 98, that’s 35 years you have to stretch your nest egg. So while 63 is not a very early age to retire, it can be a very early age. for you if you hope to live an exceptionally long life.

All things considered, retiring at 63 might work out very well for you. But you might also have difficulty due to the above factors. So think carefully before setting your ideal retirement age at 63. You may find that waiting a little longer is a better choice across the board.

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Americans aged 40 and older believe 63 is the ideal retirement age. But here are 3 pitfalls related to retiring at 63 was originally published by The Motley Fool

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