You work all your life for the day you’re free to sit back and relax.
But the closer you get to retirement age, the slower those weeks seem to crawl.
Yourearliest retirement agedepends on your age, your retirement savings and your cost of living.
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What Is Retirement Age?
before you jump in considering early retirement, it can help to break down the various retirement age minimums.
Unfortunately, 5912 is a little too young to qualify for Social Security.
If you were born after 1959 and retire at 62, your benefitswill be reduced by 30%.
Full retirement age for those born after 1959 is 67.
If you could hold out until 70, your monthly benefits will increase even more.
There are exceptions to this, though.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
There is a notable exception to this rule, though.
The best thing about a pension is that it sometimes allows you to retire earlier than your 60s.
If youhave a pension, meet with your benefits coordinator to get eligibility details.
Dont forget about any previous employers where you might have benefits.
Did you know?
Here are the top reasons many people wait until at least 5912 to file those retirement papers.
IRS Penalties
Most retirement savings plans allow the funds to grow, tax-free until you withdraw them.
The goal is to ensure participants are taken care of in their golden years.
This is in addition to the taxes youll pay.
Since many people live beyond the average, though, you simply may run out of money.
Theres also the benefit reduction you get from the Social Security Administration by retiring early.
Its important to factor that in when youre creating your post-retirement budget.
Tax Repercussions
Its important to include income taxes in your retirement budget.
Take a look at thecurrent IRS tax bracketsand budget for what youll owe the IRS.
Also consider that some of your Social Security income may be taxed.
The next best step is to start setting as much money aside as possible.
Wherever you are on your path to retirement, starting to plan is a solid choice.
Here are some things you’re able to do to accelerate your retirement.
Use Catch-Up Contributions
Turning 50 has its perks.
By working hard now, you could enjoy the fruits of that labor after you leave the workforce.
Consider Going Part-Time
Early retirement doesnt have to be an all-or-nothing proposition.
If youre burnt out or simply tired of working long hours, a job switch may be in order.
If you have extra savings, you could even consider taking a pay cut.
Another option is to retire early but supplement your earnings with apart-time job.
For 2024, those below full retirement agecan earn up to$22,320 without seeing a reduction in benefits.
Once you earn more than that, youll lose $1 for every $2 earned above the limit.
This might meaninvesting in rental propertyor putting some money into high-interest, low-risk investments like dividends.
Stephanie Faris is a professional finance writer with more than a decade of experience.
When you log into your bank account, how do your savings look?
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?