If the retirement age is, say 65 (not sure if that's accurate, just throwing it out there), can I retire earlier than that? Am I penalized? Does it depend on years of service to determine if you can retire early? I'm just asking because a lot of people at my work are retiring and it doesn't seem like they are old enough to be the legal retirement age. Thanks.
2007-08-03 11:31:40 · 9 answers · asked by BlackDahlia 5 in Business & Finance ➔ Personal Finance
Wow! There is a lot of confusion over this issue!
First of all the "Full Retirement Age" for calculating your Social Security Benefits depends on the year you were born. Go to this website to see details: http://www.ssa.gov/pubs/retirechart.htm You can start SS as early as 62(60 if a widow or widower) but you are penalized for each month early you start by a reduction in benefit.
You can take withdrawals from your IRA and Roth IRA at age 59 1/2 without penalty. There are some strategies for getting this earlier, but they are too involved for this forum.
If you retire from your company after turning 55, you can take withdrawals from the 401(k) beginning as early as 55 without penalty in most cases.
This is a very complicated net of intertwining issues. You should seek the assistance of an experienced financial planner that you trust to help you understand all the considerations and what is best for your situation and what you want to accomplish.
Best Wishes to you! I hope you have a great retirement!
2007-08-03 14:49:00 · answer #1 · answered by Darn Dave 2 · 0⤊ 0⤋
There is NO legal retirement age. The US Congress sets an age at which you can collect social security. If your company provides any retirement benefits other beyond contributing to a 401(k) or similar plan, they can set their own requirements to claim such benefits. If you have saved enough money to support your lifestyle, you can retire whenever you wish.
Note: 'Retire' does not always mean you quit working. Many people 'retire' and them start a new career they actually enjoy.
2007-08-03 12:31:02 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
You don't have to be legal retirment age to retire...but your social security is based on you working until 65 and that is what your benefits are based on...if you were to stop working at 55 you would only get what you have paid up to that point, so for some people that is a big differance in whether they can afford o retire.
To draw from an IRA you typically need to be 70 1/2 and to draw from a 401k you need to be 59 1/2, so you would not be able to start drawing right away from some of your retirement funds.
2007-08-03 11:37:19 · answer #3 · answered by Anonymous · 0⤊ 2⤋
You have to be at least 62 to collect Social Security, and you have to be at least 59 1/2 to take withdrawls without penalty from a 401(k) or an IRA. If your company has a pension plan, there will be rules as to when you can start collecting benefits. Other than that, you can retire whenever you want if you have the savings to sustain you.
2007-08-03 11:35:52 · answer #4 · answered by Kathryn 6 · 3⤊ 0⤋
If you can afford it..., you should ALWAYS ALWAYS ALWAYS retire at 62... NOT 65 and here's why......
At 62 you get a lower monthly benefit than at 65... BUT..
If you add the 36 months worth of benefits (from 62 to 65) and subtract of the difference in the 2 monthly benefits...you will find that you MUST live until your are AT LEAST 79 years old to make up the difference in the money you COULD have gotten if you had retired at 62...
EXAMPLE::: at 62 you get 1000/mo at 65 you get 1200/month
Between 62 and 65 you receive $36K... and the difference between the 2 for that time period is $7200..(200$x36months).........
So......If you retired at 65, you would have to live to 77 years old to make up the difference in money you received...( 144months at 200/month=28.8K$)
Here's the BIG stinker.... if the difference between the 2 benefits is LARGER... you have to live LONGER....
Do yourself a favor... retire at 62...
2007-08-03 11:52:42 · answer #5 · answered by I Can Count To Potato 7 · 0⤊ 2⤋
You can retire early if you have worked at the company for a long period of time. Also, military time counts as time to add up for retirement. But you cannot collect Medicare early, and that's the killer.
2007-08-03 11:38:41 · answer #6 · answered by ☆Zestee☆ 5 · 0⤊ 1⤋
No you don't. You do however, must have enough money to sustain the years you plan to be in retirement.
2007-08-03 11:43:37 · answer #7 · answered by amh 1 · 0⤊ 0⤋
you can stop working whenver you want. i think the question you should ask is, will i have enough to live on--when can I collect my pension/retirement plan/social security? and the rules are different for each plan.
2007-08-03 19:30:23 · answer #8 · answered by njyogibear 7 · 0⤊ 0⤋
want to retire now on $30,000 a year?
save about $450,000 in a mutual fund... you can retire at any age...
2007-08-03 11:43:34 · answer #9 · answered by Anonymous · 1⤊ 0⤋