Why You Shouldn't Plan to Retire at Age 65

By Xin Lu on 1 October 2010 11 comments

Most traditional retirement advice columns I read are written as a guide to retiring in your 60s. Although the advice contained in these columns may be useful to some, I think that no one should count on retiring in their 60s — you should plan to retire earlier.

A typical retirement guide advises that you should have the equivalent of your salary saved up by age 35, and two times your salary saved up by 45. These are good goals if you plan to work until you are 65 or later, but personal issues like an illness could easily take you out of commission. Additionally, because there is really not much job security anymore, even if you wanted to keep your job for 40 years, there is no guarantee that you will be able to. It is best to save as much as you can while you have a steady income so that you can retire early if you are forced to.

For those who have a pension, it is still a good idea to save as much as you can because pension programs are being cut by many companies, and even governments, due to lack of funds. There is also no guarantee that you will be able to work until your pension is vested. I have heard of situations where employees were fired just a year or two before their pensions vested. If these people were betting on the pension and did not have personal savings, then they could no longer afford to retire.

Personally I am not planning to retire at age 65 because I just think the idea that most people have to work 45 years or more is ludicrous. I feel that these traditional retirement planning guides reinforce the idea that you must work until you are past 60, and that is just not something I plan to do. I plan to retire much earlier than that and spend more of my life as I want it.

Personal finance is personal, and you have the choice not to follow the masses. You can retire early if you want to, but it will take a mindset that is considered abnormal by the mainstream.

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Guest's picture

I love the title! Being a regular WiseBread reader, I knew what the message would be (retire earlier), but many people probably thought the title was going to imply what way too many magazine and newspaper articles recommend - that you'll have to work way past your 65th birthday. I can't imagine that. That's for people who don't take responsibility for themselves. They place their future in the hands of a company and/or the government. That's garbage. I will follow Warren Buffett's advice for investing in this economy: "Invest in Yourself."

Guest's picture

I'm planning to retire by age 45, or 50 at the latest.

Guest's picture

I don't really know how you can be recommending people to start saving for retirement when they're middle aged, since there are millions of Americans who don't even have jobs right now. Most people will be lucky if they have anything saved by age 65, let alone enough to retire. It's nice to plan that way, but let's not be unrealistic.

Guest's picture

I agree. There are millions of Americans right now living paycheck to paycheck. It's easy to advise early retirement, but how do propose to do that in this economy?

Guest's picture

This is an interesting perspective that I've read in other sources, but what if you can't afford to retire any earlier than 65? I don't know what the state of your 401K is, but mine has suffered terribly lately and I have very, very good retirement plan in which nearly 25% of my salary goes into retirement.

I don't make an opulent salary, but I make twice as much as the mean income in the US. Plus I started a family later in life than most.

I know people CAN retire early, but after the recent economic downturn I hear more and more people saying that their plans for an early retirement has been put on hold.

Guest's picture

I retired at 54 and my wife retired at 60. I had planned for many years to retire exactly at that age, however my wife, an RN, enjoyed her job and wanted to continue until she could no longer work.
We dipped in to our retirement savings one year but her SS and my pension provide for most of our normal living expenses. Next year I will start collecting SS as well so we expect to pass on a good deal of wealth to our children.

Guest's picture

It is a wonderful goal but not realistically reachable by most people. I suppose if you stay single, no kids, no one to be responsible for and are able to get a college education with no debt there is a chance . . . .

Guest's picture

I'm 21 now, shooting for retirement by 35. I can't understand why the retirement at 65 thing is so popular.

Xin Lu's picture
Xin Lu

I think I want to emphasize that a lot of people just don't have the mindset for early retirement. If you believe that it's impossible then you won't even try.

Guest's picture

It's refreshing to see an article that proposes lowering the retirement age, when the politics around us are suggesting it be raised to 70 or late 60s. The reality of the matter is that if you want to retire early, you have to plan for it and work towards achieving that goal.

Guest's picture

What do you want to do when you retire? If I CAN retire by age 45, with a good pension, but I don't know what I want to do, should I retire or not? I'd like to get away from the job I'm doing now, but have never had a strong interest in doing anything else, in particular.