Should Retirement Be An Age or Financial Decision?

Historically, investors have tended to plan and save for retirement with a specific age in mind, often 65.  An age based strategy used to make sense as, in many cases, it was driven by the timing of pension benefits and the start of Medicare and full Social Security eligibility.

Now that defined benefit pension plans are disappearing and Americans are increasingly responsible for funding their own retirement, perhaps it makes more sense to consider retirement in terms of when you can afford to.

Being able to retire well before the historically traditional age of 65 may have considerable appeal to many Americans, unless, of course, they like their job so much that working is more interesting than the pursuit of alternatives.

It is also important to recognize that early retirement or retirement at age 65 may not be economically feasible for many Americans, depending on individual circumstances.

Investors who are seriously considering retirement planning, at any age, may find it advantageous to also seriously consider seeking professional advice.  The historical retirement package of indexed pension, Social Security and Medicare at age 65, while not something you would want to put on auto-pilot, is a lot less complex than anticipating all of the variables inherent in a “do-it-yourself” retirement, financially or age based.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®