Whether your dream is to retire early or work through your eighties, there are a few reasons why your retirement age matters. Deciding when to retire is one of the biggest financial decisions you will make for the rest of your life, right up there with buying a home. If you retire too early, you risk outliving your retirement savings. If you wait too long to retire, you might rob yourself of hard-earned leisure time. If you’re worried about choosing the right age, consider working with a financial advisor who can map out your retirement path with you.

Retiring Early, By Choice or Necessity

Retiring early means different things to different people. Some people dread retirement, while others count the minutes until they leave the workforce.

Recently, the financial independence movement has gained followers, prompting some individuals to retire by 40. For some Americans, early retirement is a a choice, while for others it can be a harsh reality imposed by a health crisis or a layoff.

There is no specific retirement age that works for everyone. Polls show that Americans are working later into their lives than their parents did, but in an uncertain job market, it can be tough to control just how long one will stay in the workforce.

That is why it is so important to start saving for retirement early so you can give your money plenty of time to compound. If your savings are looking a little lackluster when you hit age 50, take advantage of IRS rules that allow catch-up contributions to retirement accounts.

When determining the right retirement age, many people use their Social Security retirement age as a benchmark. Social Security benefits are available as early as age 62, but they will be reduced if you claim between age 62 and your Full Retirement Age (FRA). Your FRA is between 65 and 67, depending on when you were born. For every year between your FRA and age 70 that you delay benefits, you will receive an increase in benefits as a thank-you from the Social Security Administration.

Another important factor to consider is Medicare, which kicks in at age 65. With healthcare costs climbing, health insurance coverage is a crucial consideration for everyone approaching retirement. If you currently have health insurance through your employer but plan to retire before age 65, you will need to budget for health insurance to bridge the gap.

While a retirement calculator can help you determine whether you can afford to retire, it stops short of declaring your ideal retirement age. This will depend on a combination of factors, such as your total savings, health, employer benefits, access to healthcare and overall feelings about remaining in the workforce. For example, someone who receives healthcare through their spouse is more likely to retire before reaching the Medicare eligibility age.

Average Retirement Age

A recent Gallup poll found that the average retirement age in the US is 62. However, this can vary significantly, depending on one’s profession.

For example, university professors retire later than teachers, who have an average retirement age of around 59. Generally, those with higher levels of education and wealth are more likely to continue working past the normal retirement age.

Federal employees have their own retirement norms. As a federal employee, your Minimum Retirement Age (MRA) is the minimum age at which you can retire and receive your benefits. This is referred to as FERS, or the Federal Employee Retirement System. MRAs range from 55 to 57, depending on the year of your birth. This federal retirement age is something to keep in mind as you approach your 50s.

However, your age is not the only thing standing between you and your FERS. You also need to meet the requirements for years of service. Your age and years of service will determine whether you can take Immediate Voluntary Retirement and still receive full benefits.

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Phased Retirement Options

Easing into retirement with part-time or contract work provides income, grows savings and may keep health coverage.

Many people ease into retirement by moving to part-time schedules, contract work or consulting. This gradual shift can reduce financial pressure because it provides you with some income while also giving your retirement accounts more time to grow. It can also help maintain your health insurance coverage if it is tied to your employment.

Phased retirement can be especially useful for people who want more free time but are not ready to rely fully on savings and Social Security. Continuing to work, even at reduced hours, may allow you to delay Social Security benefits for a larger payout later. It may also make it easier to cover healthcare expenses until you become eligible for Medicare at age 65.

Employers sometimes offer formal phased retirement programs, especially for education, government and large corporations. In other cases, individuals may negotiate reduced hours or project-based work with their employer. Even without a formal program, freelancing or part-time work in a different field can serve as a valuable bridge.

Phased retirement also offers non-financial benefits. It gives retirees more time to adjust to the lifestyle changes that come with leaving full-time work. It can preserve a sense of purpose and connection while gradually opening up time for family, travel or personal projects.

For many, phased retirement becomes the practical middle ground between working full-time and leaving the workforce entirely. It provides flexibility while preserving income to make the transition to retirement smoother.

Preparing Your Finances for Retirement

Regardless of your retirement age, it is important to ensure your finances are in order and ready for when the time comes. If you fail to properly plan for retirement, you risk being unable to retire when you want, leaving you with financial struggles during your golden years.

These tips can help you prepare for when retirement comes.

Make a plan. A financial plan can help you stay on track so you have enough savings when it comes time to retire. Take the time to map out how you plan on achieving your retirement savings goal.
Save early. Do not put off saving for retirement. Instead, start saving immediately to help ensure you have the money you need when retirement begins.
Consider risk. The closer you get to your retirement age, the lower your risk tolerance may be. It is critical to factor in potential risks so unexpected losses do not force you to remain in the workforce longer than you wanted.
Work with an advisor. It can be a lot easier for you to reach your retirement goals when you work with a financial advisor who understands how to invest your money in order for you to hit your retirement age.

Bottom Line

Many Americans retire later, often easing in with part-time or freelance work, supported by savings and an emergency fund.

Americans are living longer, which often means retiring later, but retirement doesn’t have to happen all at once. Many people ease into it by reducing hours, moving to part-time work, or taking on freelance and consulting jobs. Having both a strong emergency fund and solid retirement savings can give you the flexibility to retire on your own terms.

Tips for Getting Retirement Ready

Consider working with a financial advisor who can help you reach your retirement age by managing your money. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Figure out how much you’ll need to save in order to retire comfortably. An easy way to get ahead on saving for retirement is by taking advantage of employer 401(k) matching.