With the current economic situation, it seems impossible to retire at this point. Years ago, we believed that retiring at age 65 was universal. Now we realize that it is not a law set in stone.
Due to the declining population, the use of the US government’s pension fund, and the fiat system, it is becoming increasingly difficult to maintain the pension structure. This is why the retirement age for people born in 1960 will be 67. In other words, people born in 1969 will only be able to retire when they reach 66 years and 10 months of age. On the other hand, those born in 1960 will reach full retirement age in 2027.
Why is this so important? Well, as a free individual, you can choose to retire whenever you want… But the amount of pension you will receive will depend on it. If you want to retire earlier, you run the risk of receiving a pension that is too small to support yourself financially.
What is the full retirement age according to Social Security?
Full age is the age at which you can collect 100% of your calculated benefit. This is not the same as the minimum retirement age. You can apply for early retirement at age 62 right now, but you will receive a permanently smaller pension.
On the other hand, there is also a maximum retirement age… Delaying retirement until age 70 also increases your monthly pension check. We like to complain about the Trump administration, but this particular president is not to blame. The retirement calculation table was decided decades ago.
How much do you lose or gain depending on your retirement age?
- If you decide to retire at age 62, your pension will be cut by approximately 30%… Forever.
- If you retire at the age indicated (which for Generation Z will be around 2080), you will receive 100% of your promised retirement benefits.
- If, for whatever reason, you like your job, you can continue working, or if you are still in good health, you can delay your retirement age until 70. This way, you would receive 24% more than 100% of your expected retirement pension. This would be 8% more for each full year after the required retirement age until 70.
Frequently asked questions about retirement.
Will the retirement age increase in the future? For now, there is no law passed that raises it beyond 67. However, you know that governments don’t usually give advance warning before doing these things.
What about the cost-of-living adjustment (COLA)? The COLA is announced each year and affects all beneficiaries, those who retired earlier and those who retired later.
if you don’t want to retire at 67.
Although it may seem incredible, you shouldn’t depend on the government to retire. If you want peace of mind earlier, there are savings strategies to ensure financial security in our old age:
- Save strategically: set aside 15% of your income (or up to 25% if you started contributing late, in your early 20s). Send money religiously to your 401(k)/403(b) with a match, IRA/Roth IRA.
- Diversify your investments in funds that can beat inflation.
- Pay off all your debts: you don’t want to reach retirement with a mortgage or monthly car payments.
- Emergency fund: according to financial experts, this means having a financial cushion of six to 12 months of household expenses.
- Try to have multiple sources of income: these could be rentals, a small business, or royalties; that way, you won’t be solely dependent on your pension check.
This is one way to ensure that you are not 100% dependent on a retirement that may not come on time, or that may not be enough to support you.
If you want to know more about what your pension would be like, log in to your My Social Security account. There you can download your estimated benefits based on your age. We recommend that you make different estimates: what would your pension be if you retired at age 62? What would your pension be if you retired at age 66? And what if you waited until age 70 to retire?
If you are middle-aged and don’t want to wait until 70, you still have time to save and invest so that you don’t have to depend on Social Security. With a good mindset for saving, investing, and frugality, you will achieve financial peace of mind.