Now that many of my friends are senior citizens, the question is often asked: What is the proper age to retire? In this blog entry I will address this very important topic.
First of all, the current wisdom is that you need to have at least a million dollars saved up to retire comfortably. By retiring comfortably I guess I am saying that you can still afford to pay the rent and you aren’t forced to live on ramen noodles and spam.
It just seems amazing to me that a million dollars is now a requirement for everyone! I remember a time when there was a TV show called “Who Wants To Be A Millionaire?” and back then a million dollars meant that you were rich beyond your wildest dreams! Now it just means that you can someday retire.
The next question is. when is it possible to start saving for retirement? Many people I know are just getting by, living paycheck to paycheck. If you can manage to squirrel away a little money, life usually happens. You know what I am talking about:
- The roof on the house needs to be replaced
- You need cataract surgery and the deductible is $6000
- You need new kitchen appliances
- The transmission gives out on the car
You get my drift. Therefore, I think the very best time to start saving for retirement is when you can start collecting Social Security while you are still working full time. Right now the current wisdom is that you cannot receive your maximum Social Security amount until you are 70 years old. Let’s say that you and your spouse start collecting Social Security at the age of 70 and you manage to save $50,000 each year.
Now we can easily calculate the proper retirement age! One million divided by 50,000 is 20. Therefore, you and your spouse can afford to retire when you reach the ripe old age of 90. I am providing a picture of someone here who is just about to retire from their job. You can tell they are very excited about their last day of work because of their big smile. 😀
