How to Figure Your Retirement Age

In order to calculate your retirement age in the United States, there are several factors you will need to consider, beginning with your retirement benefits from Social Security. According to the U.S. Social Security Administration, the earliest a person can receive Social Security benefits is age 62. However, if you choose to draw Social Security at this age, you will receive only a portion of the maximum benefits available, since the distributions will be drawn out those extra months or years. Receiving 100 percent of Social Security benefits will vary depending on your year of birth. Generally, if you were born in 1960 or after, you can receive full benefits at age 67. When you figure out your retirement age, you will also need to look into how much money you will need per year (factoring in inflation), what assets you have (investments, savings, 401Ks, etc.) and what debts you have. Use the following factors to help calculate your age of retirement.


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    Calculate how much Social Security you can receive, and when you can receive it.
    • Log onto the Social Security Administration's website at
    • Click on the tab for "Retirement."
    • Follow the link to "Find your retirement age." This will allow you to enter your year of birth to determine when you can draw Social Security and at what percentage of benefits.
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    Plan for at least 15 years of retirement. Because average lifespans are increasing, you will need to consider that there will be many years in which you will rely on retirement income before your death.
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    Factor in your current income. In general, you will need annually at least 70 percent of the amount of the last year of your income on which to live. This takes into consideration that you will be paying lower taxes, but it does not take into consideration inflation.
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    Calculate inflation. According to the Credit Union National Association, you will want to factor in a Consumer Price Index inflation rate of 2.5 percent per year. Use the equation i (your income at the time you will retire) x 1.025 to determine how much money you will need per year. For example, if you made $40,000 in your last year of working, you will need $41,250 in your first year of retirement, $42,500 in your second year, and so on.
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    Take into account your investments. If you need to supplement income with dividends or earnings from IRAs or 401k accounts, factor the income into your equation.
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    Consider your debt. The 70 percent of your income equation is valid only if you have paid off your home mortgage and have relatively little debt. Most people will consider a mortgage within their retirement expenses if it is not completely paid off. But if you have other debt, such as credit cards, the American Association of Retired Persons suggests adjusting the amount of living expenses you will need in retirement by paying off credit card debt. This may be done by readjusting other expenses to set aside credit card payments. The AARP suggests lowering household expenses or selling personal assets in order to become debt free. If you are unable to do this, you may want to adjust your annual percentage of living expenses to 80 percent or higher.
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    Figure out the total number of years you need to live on your retirement income. If you plan on needing at least 15 years of retirement, add your factors together (including the totals of income per year with inflation) and divide by 15. This will allow you to see if your predicted retirement age is workable.


  • Don't forget to factor in unexpected expenses, such as medical or life insurance premiums. Leave some wiggle room for medical expenses not covered by Medicare, or the rising cost of other insurance premiums. When calculating 70 percent for your yearly expenses, add some discretionary money annually to account for emergencies or fluctuating payments. This may call for an adjustment of living expenses closer to your last year of income before retirement.
  • If you decide you are going to retire on a more modest income level than you are used to, you may lower inflation figures when calculating your yearly income needs.

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Categories: Retirement