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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, according to the study.
In fact, Generation X, who are between the ages of 45 and 60 today, are generally unprepared for retirement (3). A report from the Retirement Income Institute’s Alliance for Lifetime Income (ALI) showed that Gen X will be “entering retirement less secure than any generation before them.” Women in this age group have average retirement savings of $6,000 and men have $13,000. Moreover, only 14% of this generation have access to traditional pensions.
Based on the MassMutual survey, 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. Meanwhile, 34% of pre-retirees believe there’s a decent chance they could outlive their savings, with 22% of retirees sharing this concern.
To put this in perspective, a Northwestern Mutual study found that the average American thinks they’ll need $1.46 million to comfortably enter their golden years (4). In this similar study, nearly half of respondents worried that they’d outlive their savings.
Put simply, retiring at 62 or 63 might 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 should also be considered 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. The AARP reports that around 12% of men and 15% of women are solely dependent on their monthly check for retirement income (5).
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 One Big Beautiful Bill Act (OBBBA) — even earlier than the previous projection of the first quarter of 2033 (6). Basically, taxes on social security are used to fund future retirees. By providing additional deductions on Social Security, the OBBBA has effectively reduced the amount of money that can be reinvested in Social Security, at least for now.
Meanwhile, Medicare eligibility begins at 65 (7), 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 (8). 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 (9). And that’s without considering how many of those remaining years will be healthy.
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, not to mention any health complications that arise.
Read More: Robert Kiyosaki warned of a ‘Greater Depression’ — with millions of Americans going poor. Was he right?
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.
Get an expert opinion
A financial advisor can help crunch the numbers and build a plan that works.
But hiring an advisor can be a lifelong commitment, which could make or break your retirement. That’s why finding reliable advisors is crucial. It can also be a serious boost to building confidence in your retirement. The ALI report found that only 41% of Gen Xers believe their retirement savings will last through their golden years. Among those working with an Advisor, that number jumps to 71%.
That’s where Advisor.com can come in. The platform connects you with up to three Advisors 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 yourself, like your ZIP code, plus some information about your financial 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.
Track your spending — and saving
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.
A quick daily check-in of your accounts can show you exactly where your money is going.
An app like Rocket Money can easily flag recurring subscriptions, upcoming bills and unusual charges by pulling in transactions from all your linked accounts.
This can help you cut unnecessary costs, and then you can manually redirect savings straight into your retirement fund. No spreadsheets, no guesswork, no stress. Small habits like this can make a big difference over time.
Rocket Money’s intuitive app offers a variety of free and premium tools. Free features include subscription tracking, bill reminders and budgeting basics, while premium features — like automated savings, net worth tracking, customizable dashboards, and more — make it easier to stay on top of your retirement contributions and overall financial goals.
Build a buffer
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.
A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.
A Wealthfront Cash Account currently offers a base APY of 3.30% through program banks, and new clients can get an extra 0.75% boost during their first three months on up to $150,000 for a total variable APY of 4.05%.
That’s ten times the national deposit savings rate, according to the FDIC’s March report.
Additionally, Wealthfront is offering new clients who enable direct deposit ($1,000/mo minimum) to their Cash Account and open and fund a new investment account an additional 0.25% APY increase with no expiration date or balance limit, meaning your APY could be as high as 4.30%.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.
Tap into your equity
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.
The only thing to watch out for if your health. Make sure to know your family’s medical history, and be ready for potential complications.
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.
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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); Retirement Income Institute’s Alliance for Lifetime Income (3); Northwestern Mutual (4); AARP (5); American Society of Pension Professionals & Actuaries (6); Medicare.gov (7); Centers for Disease Control and Prevention (8); Yale School of Public Health (9)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
