Mandatory retirement age – What is the best time to retire?

The thought of retiring early and sipping coconut water on a beach in Hawaii for the rest of your life is really nice and appealing. Taking up newer hobbies, traveling around the world, exploring new and exciting places, or just giving time to your family and seeing them achieve their goals can be a beautiful thing to look forward to. However, this might not be possible for you if you do not have the amount saved up to support the lifestyle you live fully.

 The mandatory retirement age in the US currently is 66 years and two months. You can fully claim the monthly social security benefits after this age. However, let us determine what will happen if you decide to retire early or late.

mandatory retirement

Early retirement

Early retirement can be defined as retiring before the age of 66. Now early retirement may or may not be for you. Hanging your coat and finally relaxing can be good, however, research shows that people who work longer tend to stay a lot healthier and happier. But you may have decided that you no longer need to be on the grinding wheel, so what should you have for retiring early.

The very first thing you need is a large amount of cash at your disposal. You need to have money (a lot of it) to live as you no longer have a paycheck. For someone who is a millionaire, retiring early maybe a lot easy for them. For the average joe, however, things need to be planned out a lot more. You need to figure out your annual expenses for your lifestyle and then multiply it by 25 to ensure that you will not outlive the money you have.

You also need to be aware that you will not be eligible for Medicare until you reach the mandatory retirement age, so a good chunk of the money you saved up will be going to pay the monthly premiums for your health insurance.

However, social security might alleviate some of that burden as you can become eligible to receive the benefits at the age of 62. Still, you will only receive 75 percent of the entire check. However, one should never depend on social security and we believe that it is essential that you have your finances in order before opting for early retirement.

Normal retirement

Normal retirement can happen once you are 65 years old or reach the mandatory retirement age. We believe that this is a great time to retire, financially speaking. You might have the right amount of cash saved up through your retirement benefits. If you go for social security, you will receive a full monthly amount, supplementing your monthly expenses nicely. You will also be eligible for Medicare, which will no longer bite your monthly expenses.

All in all, for the average joe, the normal retirement age is the best time to retire. You are healthy and wealthy if you have planned your finances well, and you will not have to worry about outliving the money you saved up.

Late retirement

Late retirement refers to retiring at the age of 70 or over. The concept of retiring late may even be useful for someone theoretically. A person retiring late should have a lot of money saved up thanks to their post-retirement benefits and 401k plans. This will ensure that one never has to worry about outliving the amount they have saved up. The social security payments will also be at their highest, which will supplement their lifestyle very nicely. There should also be no worries about paying your insurance premiums, so all in all, it can all work out very nicely for a person if they opt-in for early retirement.

However, all this sounds good theoretically until we see that early retirement may be necessary for many people in America because they do not have the option. According to a national statistic, four out of five Americans have less than a year’s income saved in their retirement accounts. There are also many working Americans who do not have a retirement account, so retiring late is the only way to survive.


Whether you go for early retirement or a later one, you have to be smart about planning your expenses. If you do not plan out your expenses well, your retirement may take you over to the poverty line, which is not a good way to go. So, be smart and ensure that you will not be outliving your money anytime soon if you retire.

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