Retiring after age Sixty-Five

Retirement can come at any age; it doesn't automatically have to be at age 65. People often retire earlier, and for many different reasons. But, there are benefits in waiting until that magic number to officially hang up your work clothes.

Some people will have many jobs in their lifetime. For baby boomers, it was more the norm to have one job and stay there for thirty years. After thirty years with a state or federal job, you can typically draw a pension, and many people do so. Many others, however, are working longer than that. Even if they have thirty years in, they are continuing to work until the government-appointed retirement age. To their way of thinking, there are benefits in doing so.

Companies that have employees who are approaching the retirement age may offer incentives to persuade them to retire early. By doing so, the company can lower its overhead and hire much younger workers for considerably less than it was paying the older employee.

Thankfully, people are living longer today. In fact, normal lifespan after retirement has almost doubled. A person can actually be retired for almost as long as they have worked. As such, more money is needed for expenses. These expenses include medical care, housing considerations, and leisure activities. Furthermore, the age at which seniors can now start drawing Social Security benefits is 62. In other words, you can actually shave three years off of your 'working' life.

But, be careful here. A person who retires at 62 will not receive their full Social Security benefit. You're aware of the Statement that's sent out each year to tell you what you would receive each month if you kept the same earnings until retirement, aren't you? Well, the amount that's shown there is your full retirement amount, but that's not what you will receive if you retire at early. For baby boomers, in order to receive 100% of the retirement benefit owed to them, they'll have to work until they are 66. Even those people who turn sixty-five in 2008 will have to wait an additional ten months to receive full benefits.

Retiring early will mean a twenty-five percent reduction in the benefit received from the Social Security Administration. This will continue for the remainder of your retired life. Just four fewer years of working will cost you one-fourth of the money that you would otherwise be getting. There is a bright spot, however. You can continue to work during those four extra years, but you can't make over a certain amount of money. (If you've judiciously prepared your finances for your golden years, this should not be too much of a problem.) A full-time worker can go part-time for those remaining four years and still be eligible for full social security benefits when he or she turns 65.

Remember, there are benefits to working after age 65. You can continue to be gainfully employed (hopefully at a more leisurely job) until your full benefits kick in for you.

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