When should you retire or start collecting Social Security?


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There is no correct age to retire. The decision is solely dependent on factors like lifestyle goals and financial capabilities. The official age of retiring is 60 years old, however, these days people are fine to retire early to make the most of the new opportunities life offers.

The factors that determine the right age to retire are as follows:

  • Life purpose

The theory of self-actualization relates to reaching one’s maximum potential. According to Abraham Maslow, developer of the self-actualization theory, there are four basic human needs: physiological needs, safety, love and belonging, and self-esteem. Once a person achieves it, they set out to achieve the best they can be, do and have.

If you feel like you have reached a high point and want to take time for yourself or help others, then you can retire early.

  • Financial security

In order to retire comfortably, you must have sufficient assets. This means more assets than liabilities like loans and recurring bills.

Speaking of financial security, before you quit, be sure to pay off all types of loans because you won’t have a steady income in retirement and will need to use your savings or investments. Therefore, repaying your loans is a must.

  • Family Goals

When your children are grown and financially independent, you may want to consider early retirement. However, the decision to retire should take into account future life goals such as raising children and getting married. Maintaining your financial independence and covering the costs of important life events requires a long-term perspective and financial discipline.

  • Career goals

The average age of top corporate executives is much lower than the previous generation. Once you have achieved your desired goals in terms of moving up the corporate ladder, you may wish to explore other opportunities, either as a consultant or mentor. Unparalleled flexibility and variety in terms of projects. Retiring early to get a grip on work-life balance is also a big reason people retire.

  • Legal sealing

According to the laws of the country or institution, a person working in a private company must retire at age  58 and be a government employee at age 60. Once you have reached the statutory retirement age in your country,  you have no choice but to retire.

  • Investment portfolio is updated

There are three parameters that affect an individual’s ability to live off their savings when they begin retirement: first, the size of their savings or investment portfolio at retirement; second, the expected growth rate of the portfolio in the future (the average annual return) and third, the amount of annual withdrawal/consumption the retiree will need to maintain (or not) that lifestyle.

In conclusion

Retiring too early can be a mistake that prevents you from enjoying your retirement to the fullest, especially if you are being forced back into the workforce out of financial necessity rather than your own choice. Take the time to plan carefully to make the right decision about when to retire.

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