7 Signs You Might Need To Retire at a Different Age Than You Had Planned

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Angela Mae

Sat, Apr 6, 2024, 7:00 PM 6 min read

While most people retire in their early to mid-60s, it might make more sense for you to retire at a different age. It all depends on your financial situation, your needs, your lifestyle and your goals. That’s why there’s no one-size-fits-all approach to choosing your retirement age.

Even so, there are certain signs that you might need to retire at a different age than you originally planned. This could have to do with your eligibility for certain programs. Or it could be because of withdrawal requirements — or contribution limitations — of certain retirement accounts.

Whatever the case, here are the top signs that you might want to change your retirement date.

Also, here’s what to do if you’re worried about not having a sufficient nest egg.

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You Don’t Have Enough Retirement Funds

You’ll need to make sure you have enough money to support your lifestyle and other financial needs in retirement. This includes long-term care, everyday expenses and emergencies.

“If you have not saved enough and/or plan to spend more in retirement than you originally thought, it may be necessary to retire at an older age,” said Chris Urban, certified financial planner (CFP), retirement income certified professional (RICP) and founder at Discovery Wealth Planning.

What it comes down to is your withdrawal rate and whether or not that’s sustainable given your current age, your life expectancy and your desired retirement age. If the funds simply aren’t there or if you expect your accounts to run out of money sometime during your lifetime, you may need to rethink your plans.

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You Haven’t Reached the Right Milestone Yet

As you get older, you’ll start becoming eligible for different things — like Medicare or Social Security. Generally, you won’t be able to withdraw from certain retirement accounts or collect these types of benefits until you reach the right age.

These are some of the main age-based milestones you’ll need to reach before becoming eligible for these benefits:

Age 50: “Individuals who are age 50 or over at the end of the calendar year can make annual catch-up contributions,” Urban said. “Annual catch-up contributions may be permitted by these plans: 401(k) (other than a SIMPLE 401(k)), 403(b), SARSEP, governmental 457(b).”
Age 55: “Age 55 is important because if someone retires after reaching 55, then they can get access to the company retirement plan from where they retired without paying a 10% early withdrawal penalty,” said Jamie Upson, owner and senior financial advisor at Stonehearth Capital Management. “They would still owe taxes, but would avoid the 10% penalty for pre-59.5 withdrawals.”
Age 59 1/2: This is when you can start taking penalty-free withdrawals from your retirement accounts (like your Roth or Traditional IRA).
Age 60: This is when a widow or widower would first gain access to survivor Social Security benefits, which may or may not matter to you.
Age 62: “Age 62 is when those who have enough Social Security credits are first eligible to claim benefits (at [a] reduced payout rate, and subject to earning limitation which might result in just giving back most/all of the SS benefits),” Upson said.
Age 65: This is when most people start qualifying for Medicare.
Age 66 or 67 (depending on when you were born): This is the full retirement age for Social Security benefits.
Age 70: Retirees can claim the maximum Social Security benefit.
Age 70 1/2: You’ll become eligible for Qualified Charitable Distributions (QCDs), meaning you can donate to charities instead of taking your required minimum distributions (RMDs).
Age 72 or 73 (depending on when you were born): This is when you’ll need to take RMDs from your retirement accounts.

Think about where you are right now, and whether you’re at an age where it makes sense to retire based on these milestones. If you don’t need the benefits that come with age, take that into account as well.

You Haven’t Really Prepared

It’s hard to prepare for everything, but the sooner you start the better off you’ll be.

“Starting retirement planning early is crucial as it allows for the power of compounding to work in our favor, potentially multiplying our savings over time and providing a more secure financial future,” said Angela Ashley, founder and CEO at Unique Investment Advisors. “Most of us can see that, but it’s the unforeseen that makes it that much more vital.”

It’s never too late to start planning your retirement. However, if you find yourself doubting your financial stability during your later years, you might need to change up your plans.

You’ve Experienced a Major Setback

If you’ve experienced an unexpected expense or financial setback that has depleted your retirement funds, you may also need to delay your retirement age. As you rebuild your savings, you can reassess your goals and figure out how and when you can retire.

You Haven’t Factored in Healthcare Costs

“Rising healthcare costs and the real likelihood of outliving savings are common reasons I see for delaying retirement,” Ashley said.

The average American lives until the age of 76.4 — 73.5 for males and 79.3 for females. But a lot of factors, not least of which is your health, can impact your longevity. The better your health, the longer you’re likely to live and the more money you’re going to need to comfortably retire. If you don’t have enough money to cover healthcare expenses, you might not be able to retire as planned.

“I’ve seen firsthand that retirement isn’t always by the book. I had a client who could retire at 55 because her startup took off way beyond her dreams,” said Rhett Stubbendeck, CEO and founder of Leverage Planning. “But it can go the other way, too. Another client faced unexpected medical bills that threw a wrench into his retirement plans, pushing his timeline back.”

You’ve Forgotten About Long-Term Care

A lack of long-term care planning can also be a sign that you need to adjust your retirement age.

“Many clients approach retirement without a clear understanding of how elder law factors, including long-term care costs, can dramatically impact their financial security,” said Marty Burbank, estate planning expert at OC Elder Law. “These costs can quickly deplete retirement savings.”

If you haven’t already set aside money for long-term care, you might need to delay your retirement until you have enough financial resources to cover it. Even if you don’t end up using that money, having it will give you peace of mind.

You’re Financially Responsible for Others

If you’ve found yourself in a situation where you need to take care of others financially — whether their parents, siblings or grown children — you might need to reevaluate your retirement plan. The more people who depend on you for financial support, the less you’ll have for your own future.

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