What Is Your Real Retirement Age Going To Be?

by Mike on July 19, 2014

real retirement age

Having recently celebrated my 40th birthday it occurred to me that my retirement age is now something I needed to think about as something other than what I boast to my friends of. That it used to be something I didn’t need to worry about as I was far too young right? With personal finances and the state of the global economy the real question here is at what age do I really think I can retire and maintain the life I am used to. What am I really going to need finance wise to live happily?

So back to you the reader. Have you even though about retirement? Have you already guessed what your real retirement age is based on you present financial circumstances or are you avoiding thinking about it like I am?

Here are some helpful signs and tips that will help you determine your real retirement age:

Check your health.  Healthy and fit means lower medical costs in the future.  But if you are starting to feel that your body is giving up sooner than maybe just maybe you can might qualify for a disability allowance or pension.  One note though, as much as possible get a reliable health insurance with a good coverage especially for you American readers. Harrine Freeman, CEO of H.E. Freeman Enterprises in Bethesda, Md advised that, “Health insurance including life, disability and long-term care is a factor in whether you can retire early.

Do you have kids? And if so, are they financially dependent? Remember that if your children are still in school, you need to have enough to cover for their expenses until they graduate and even find a financially stable job. Something I find quite interesting with many of my associates and friends (especially as I have no kids) is how they feel that with help from their children they can either increase the lifestyle of their retirement or bring their actual retirement forward. I personally think with the next generation of children this could be a dangerous assumption and if anything is going to push your retirement age further away!

Do some math when you check your pension/retirement plan. Whether you have a pension through a union or through your employment contract give this a try to have a look at your real retirement age. Count the number of years you have been in service.  Divide that number of years by five then whatever the answer is; subtract it from your retirement age.  On the other hand for those of us who are self-employed you will need add 2 years to this to help look at your real retirement age.

Your finances should be in place or nearly there.  If you are still paying off debt, know how long do you still need to have it fully paid?  Don’t forget your house as well whether you are still paying your mortgages or how far off are you from having a property you can call your own.

How are your investments and savings?  Retirement means you will no longer be working and even if you will be receiving your monthly pension, money will no longer come as it used to be when you worked.  That being said, you need to make sure you have investments or assets that will protect you from economic distress or unexpected financial pitfalls. Plenty of retired people had to come back into the workforce when the GFC hit as their investments and assets dried up. Also on a personal note don’t forget that you need enough savings to give you the chance to finally enjoy that coveted vacation you’ve been dreaming of since you started filling out your job resumes along long time ago.


The retirement dream

Retirement used to conjure images of countless vacations, sipping lemonade on your porch or enjoying the sun as you tend to your garden but has taken on a lot more meaning to all of us the older we get.  Heck even our day dreaming about retirement in our current economic time is no longer as pleasant as it was before.  Why? With all the financial crises as well as our increasing expenses what used to be a perfectly fine amount to retire on doesn’t even come close any more. The result? We all think we are going to have to work longer and longer and have no real idea what our retirement age is going to be. The Australian Government actually INCREASED the age you can retire legally in this country! Increased it!

All of this means your retirement age is not something that you can calculate accurately.  It is not a number you need to reach but rather a look at the state of your life now and what you feel it will be in the future. Studies show that three out of ten working individuals expect to work beyond their original retirement age so that when it’s time to call it quits they can live the type of lifestyle they dream of.

So for the rest of us as early as possible getting to know (or guesstimate)  your real retirement age is a step to the right direction.  Not only will you have enough time to plan and prepare but you can also find ways to make the transition smoother.

Know someone considering their retirement? Thinking about it yourself? Leave us a comment and dont forget sharing is caring!


***Photo thanks to Simon Cunningham & lendingmemo.com***

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