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Figuring Out When To Start Your Second Act

August 20, 2020

Many Gen Xers and baby boomers look forward to retiring on their terms. In such a circumstance, the key question becomes when to walk away from work. According to the Center for Retirement Research at Boston College, the average retirement age is now 65 for men and 63 for women.  You may retire before or after that age, depending on a few critical factors, which can vary per individual.

First, what do you see yourself doing in retirement? If you have a strong, clear vision of what you want to do, then you might be mentally prepared to retire sooner rather than later. If your sense of identity and your friendships are linked to your career, you may want to put off retiring while working on that clear vision of the future. A second factor is your health. This argument says to retire while you are still healthy rather than working until your health compels you to retire. The third is the nature of your job. If you do hard, physical work or work that cannot be done remotely, you may want to anticipate an earlier retirement compared to some of your boomer or Gen X peers. Fourth is the amount of retirement savings you have. Should you need to increase that amount, you could delay your retirement and postpone claiming Social Security retirement benefits. Even holding off on both for a year or two might give you more compounding and more monthly retirement income.1