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Old 11-21-2016, 08:38 AM
 
Location: Jacksonville, FL
11,145 posts, read 14,135,139 times
Reputation: 7075

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Hi. I'm 32 years old and trying to figure out the best way to plan for retirement. I am confused as to what age I should aim to retire. According to the Social Security Administration, my normal retirement age is 67 in order to receive the full benefit. Also, according to the SSA, my life expectancy is 82.3. Now, according to my 401k plan, I can start withdrawing at the age of 59.5 without penalty, but am required to make withdrawals by the age of 70.5, and of course, the required minimum distribution (RMD) rules that apply thereafter.

So, what is considered the normal age to retire in this country, for someone who is now 32 years old (I was born in 1984)? How on earth do I know what age to plan for? It matters, because it affects how much I need to contribute to my 401k now.

Am I supposed to retire at 67? 59.5? 63? 70? Help!

Also, how am I supposed to know when I'm going to die?!

Last edited by nep321; 11-21-2016 at 09:10 AM..
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Old 11-21-2016, 08:45 AM
 
Location: San Diego
1,085 posts, read 715,097 times
Reputation: 1351
As soon as you can. 59 worked for me.

Also may want to look into Which states are more tax friendly.
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Old 11-21-2016, 08:58 AM
 
13,949 posts, read 7,429,050 times
Reputation: 25452
At age 32, you can't possibly plan a retirement age. All you can do is accrue as much wealth as possible so you can retire when you want to retire and not retire when you have to retire due to some health event or employment event.

So what are you doing to accrue as much wealth as possible. The middle class mostly does that by owning their home outright and accruing tax deferred savings in an IRA or 401(k). Unless you work in the public sector, you don't have a pension. That is a very modest retirement. You need to be saving & investing after tax money to do better than that. Create your own business. Income property. Invest in the stock market. There are lots of paths that can get you there. That's what you need to plan, not some hypothetical retirement age.
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Old 11-21-2016, 09:01 AM
 
Location: NE Mississippi
13,689 posts, read 8,594,306 times
Reputation: 19939
Quote:
Originally Posted by nep321 View Post
Hi. I'm 32 years old and trying to figure out the best way to plan for retirement. I am confused as to what age I should aim to retire. According to the Social Security Administration, my normal retirement age is 67 in order to receive the full benefit. Also, according to the SSA, my life expectancy is 82.3. Now, according to my 401k plan, I can start withdrawing at the age of 59.5 without penalty, but am required to make withdrawals by the age of 70.5, and of course, the required minimum distribution (RMD) rules that apply thereafter.

So, what is considered the normal age to retire in this country, for someone who is now 32 years old (I was born in 1984)? How on earth do I know what age to plan for? It matters, because it affects how much I need to contribute to my 401k now.

Am I supposed to retire at 67? 59.5? 63? 70? Help!
You're actually getting a little neurotic about it, I think.

Just do the work you enjoy, save what you can, be nice to people, try not to pull out in front of a dump truck, and hope you don't get hit by a meteor.
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Old 11-21-2016, 09:03 AM
 
Location: Northeastern US
14,197 posts, read 9,091,096 times
Reputation: 6081
It's up to you. It depends. I know ... not helpful ;-)

There used to be a "normal" / expected retirement age of 65. That has been gradually revised upward. You're young enough that it's just about guaranteed to creep up before you approach retirement age. Exemptions for decreases or delays in retirement benefits, especially Social Security, are generally only deferred for people over 50 at the time such changes are made. This keeps people approaching retirement from coming after the politicians with pitchforks and tar and feathers.

It's my view that one should plan to retire when they want to and adjust for the (lack of) support from Social Security, health care coverage, and whatever company retirement you have. Don't count on loyalty from your employer, assume SS will get progressively screwed up, etc. You should also look at your family health history. If you're healthy and both sides of your family are long-lived stock, your calculus would be different than if your family is riddled through with diabetes and heart disease and you're working a sedentary job and are already overweight.

Another factor is how much you actually enjoy your work and how flexibly you can work as you age. I happen to love what I do for a living so much that I would practically do it for nothing if I didn't need food and shelter. It is also easy for me as an independent contractor to work flexible hours, from home, or even independent of geographic location (I have put in productive work days from all over the world). So ... continuing to work well into my dotage is not a Bad Thing in my case, I just might want to be more choosy about the volume and exact nature of the work I accept.

Nothing says retirement has to be "all or nothing" either. You might just start slowing down at 60, working just enough to cover your costs, start drawing on your 401k at 65, toss in SS at 68 or 69 or whenever think they will let you have it in the late 2040s / early 2050s, etc.

If you target full retirement at 65 with the assumption that SS will not even be there when you retire, you will probably have more than enough to meet your goals (assuming of course you're fortunate enough to have a high enough paying job).

This is all from the perspective of the privileged / professional classes. If you're struggling to get into or stay in the middle class, good luck; the best advice I have for you there is to vote in as many progressives as you can and hope for the best. The middle class is dying, and there are many who are actively helping it along.
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Old 11-21-2016, 09:13 AM
 
Location: Columbia SC
8,992 posts, read 7,758,201 times
Reputation: 12201
Quote:
Originally Posted by GeoffD View Post
At age 32, you can't possibly plan a retirement age. All you can do is accrue as much wealth as possible so you can retire when you want to retire and not retire when you have to retire due to some health event or employment event.

So what are you doing to accrue as much wealth as possible. The middle class mostly does that by owning their home outright and accruing tax deferred savings in an IRA or 401(k). Unless you work in the public sector, you don't have a pension. That is a very modest retirement. You need to be saving & investing after tax money to do better than that. Create your own business. Income property. Invest in the stock market. There are lots of paths that can get you there. That's what you need to plan, not some hypothetical retirement age.
The above is all good advice. I would add to always live below your means to be able to set more aside for retirement. Consider not having children (or no more than 2) as they can be very expensive. Also have a working spouse so you both can work toward that retirement.
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Old 11-21-2016, 09:26 AM
 
Location: Charleston, SC
1,367 posts, read 768,850 times
Reputation: 2428
You should be preparing yourself for the possibility of a Forced Retirement anytime after your mid-50's.

In the current economy, the older workers are essentially considered a Liability. They are often at the high end of the pay scale and can be replaced by younger, cheaper workers. They have what management may consider an excessive amount of vacation and sick time. The older worker may be slow to pick up on newer technical processes. The list goes on and on.

If you are forced into looking for new employment after the age of 50, it can be a daunting experience. You are not going to go back to college to upgrade your degree, and you are too old to start an Internship. Your Resume' will start too look very stale with any kind of long gap in Employment history. By that time in life, you should have a hobby or side interest that you can turn into a cash generator.

If you get RIF'd at 55 years of age, there are ways to tap into your savings without penalty. The only major calamity could be Health Insurance for you and your Family. But if you've been diligent in your planning, you can cover that.
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Old 11-21-2016, 10:33 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,638 posts, read 39,998,659 times
Reputation: 23801
Retire early, retire often.

Age 16, 35, 49 worked for me. You never know when you might croak, so have fun today.

Single earner hourly income family. Homeschooled, farmed (by day, factory job by night), lived frugaly but fun (4 international assignments with family). I have always loved my jobs, and worked 60-70 hrs / week. Often 2-3 jobs. Retirement is fun too. Volunteer a lot and travel a lot. 16 flights booked for next 4 months. + driving trips. We travel as cheap as staying home. Soon we will not be able to travel (chronic health of spouse). Then we will love being home. Plenty of things around home to enjoy, and a great view is essential (at least very nice) when home-bound.

Not rich, had side interests to build wealth. (real estate; building view homes + commercial props)

Wage income is very 'additive' / incremental for wealth building, and subject to very heavy taxes and fees. (More coming).
Manage your money, especially your spending and investments.
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Old 11-21-2016, 10:38 AM
 
Location: Central Mexico and Central Florida
7,108 posts, read 3,468,096 times
Reputation: 10184
I retired at age 50, never looked back.

The quality of your retirement is not based on how much earned while you worked; it is based on how much you saved while you worked.

Feed that 401K.
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Old 11-21-2016, 10:42 AM
 
100 posts, read 65,428 times
Reputation: 377
Retirement isn't an age, it's a number. It's good that you are at least thinking about it at age 32 so you can lay a good financial foundation and start building on it. The way I would approach it is to stay out of debt; invest 15% of your gross salary into tax favored investments making sure you take advantage of any company match in your 401k; pay off your house early so you can invest at least some of that money. Any while you are doing all of that, chill out and enjoy life.
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