As you think about your golden years, it’s important to consider your ideal retirement age — one that reflects your hopes for retirement but is also rooted in the reality of your financial status. And the truth is, we should be thinking about our preferred retirement age well before we’re close to reaching it.

While most people envision 65 as the age of retirement, each individual should have a number specific to their goals and finances. Using a retirement calculator or a financial planner can help.

What Is Your Retirement Age?

Your retirement age is the best age for you to retire based on several factors, including your overall health, the trending economic business cycle, and the savings earmarked for this life event.

Selecting the right retirement age is vital to a sound retirement strategy. Doing so can protect you from risks like the sequence of returns known to obliterate retirement portfolios. If you don’t consider longevity risks when selecting a retirement age, you could even find yourself back at a part-time job to cover your bills.

When calculating your ideal year to retire, there are two different ages to consider.

The first is your full retirement age when you become eligible for Social Security’s Primary Insurance Amount (PIA), or 100% of your estimated Social Security payments. The second is at what age you can feasibly retire based on the full amount in your savings and retirement accounts.

Below, we’ll discuss both retirement ages and review how to calculate your retirement age without risking your nest egg.

Social Security

If the sheer thought of calculating your retirement age stresses you out, don’t worry: The Social Security Administration actually determines your full retirement age for you, depending on your birth year:

• If you were born between 1943 and 1954, your full retirement age is 66.
  If you were born between 1955 and 1959, your full retirement age is between 66 years and two months and 66 years and 10 months.
  If you were born in 1960 or later, your full retirement age is 67.

While you can begin claiming Social Security benefits at age 62, it would be reduced by as much as 30%. In contrast, delaying your retirement to age 70 can increase your payments by 8% annually.

Retirement Calculators

If you take a more hands-on approach to your finances or work with a certified financial planner, you can use a more complicated (but accurate) calculation to determine your retirement age. One of the easiest ways to determine your retirement age is by using a retirement calculator.

But a word of caution: Like with any other financial tool, if inaccurate data goes in, inaccurate data will come out. Make sure you are inputting valid data when calculating something as important as your retirement.

For an accurate calculation, you’ll need the following correct and up-to-date data:

• Your current age
  The age you want to retire
  Your investment style/risk tolerance
  Your total household pre-tax income
  The total amount you have saved for retirement to date
  The amount you put toward retirement each year (contributions via your employer count)
  How much you will receive from Social Security benefits and what your full retirement age is
  Any other supplemental income you will receive each year in retirement (i.e., pension, deferred compensation, etc.)
  How much you plan to spend each year of retirement

Pro Tip: In addition to retirement calculators, you can find free tools online to calculate estimated medical expenses in retirement.

While this is not a comprehensive list, knowing this information will make it easier to generate an accurate estimate of your ideal retirement age. Empowered with this information, you can use calculators like the Charles Schwab Retirement Calculator to estimate your age of retirement more accurately. Such calculators can even show you how much you’ll need to save to retire at your ideal age.

Please remember that this is only a rough estimate and should be treated as such. Certified financial planners consider other essential factors that most free calculators don’t, including market volatility, inflation, leaving assets to heirs, and managing liquidity needs.

Calculating Your Retirement Age: We’re Here to Help

Determining your retirement age will keep you on track for your retirement savings, but it can be tough to calculate on your own, and free retirement calculators only go so far. Having an experienced and knowledgeable financial planner by your side is a smart move for retirement planning.

Our Felton & Peel Wealth Management planners are available to help you build a robust financial plan and reach your retirement savings goals. Please schedule a consultation with us today to get started.