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Your retirement age: What’s the best time to stop working?

Have you ever wondered why age 65 is considered the “normal retirement age”? What if you plan to retire earlier or later, or phase out of the workforce? Here’s how to time it just right.

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4 min read |

Age 65 has long been considered the typical retirement age, but Americans have different thoughts on when to retire.

The 2023 Principal Financial Well-Being Index℠ indicates that each generation expects to retire at an earlier age than the last. And more and more people are thinking of retirement differently: showing interest in gradually decreasing their working hours as opposed to retiring all at once.

The Silent Generation 

Born 1928–1945 

Traditional retirement was much more common for people currently over age 75.  


Born 1946–1964

Typically plan to immediately go from working full time to retirement— around age 68. 

Gen Xers and Millennials

Born 1965–1980, 1981–1996

Desire a phased approach, gradually decreasing their hours—starting around ages 64 and 59, respectively. 

Gen Zers 

Born 1997–2012

Expect to immediately go from working full time to retirement—around age 55. 

There are considerations and ramifications, though.

The age 65 norm comes, in part, from old rules around Social Security benefits. Back when the Social Security program began, workers could receive unreduced retirement benefits beginning at 65. That number has ticked up to 66 or 67, depending on your birth year.

Many additional retirement milestones also come into play.

Retirement milestones by age
Age 50 You may begin making catch-up contributions for employer-sponsored retirement plans and IRAs.
Age 55 You may withdraw money from retirement plans without the 10% IRS penalty if you leave your job or retire.
Age 59½ You may withdraw money from retirement plans without the 10% IRS penalty regardless of your work status. While you won’t be penalized, you may still owe income tax on any distributions.
Age 62 The earliest age you may begin collecting Social Security, though the amount will be reduced to 70% of your full benefit since you haven’t reached full retirement age. This decrease is usually permanent.
Age 64–65 Enrollment for Medicare opens at age 64, then coverage kicks in at 65. If you’re enrolled in Social Security, you may also consider Medicare supplemental insurance (also known as Medigap) to cover some of your co-pays and deductibles.
Age 66 The Social Security full retirement age for anyone born 1943–1959. You’ll get 100% of your benefit.
Age 67 The Social Security full retirement age for anyone born 1960 or later. You’ll get 100% of your benefit.
Age 70 If you begin collecting Social Security now, you’ll get the maximum benefit, up to 124%.
Age 73 You must start making withdrawals—called required minimum distributions (RMDs)—from your retirement plans.

Finding the retirement age that’s right for you

Of course, you won’t be able to find your ideal retirement age in any of the charts above. It’s a personal decision built on answers to some big questions. For starters:

  • How much will you have in savings at your target retirement age? How does that number change if you give or take a few years?
  • How much money do you need or want in your bank account each month in retirement? This may be informed by your spending and saving habits today, or you may have different needs in retirement.
  • Do you plan to have continued income from a part-time job or phased retirement?
  • What does longevity look like in your family? People are living longer in retirement today than any other time in history, so understanding how long your assets will realistically last is critical to any successful plan.

It’s a lot, we know. Our Retirement Wellness Planner can help you visualize how your savings would play out at any chosen retirement age. Or if you’re looking for more support, a financial professional can help you navigate what makes sense for you.

How to avoid outliving your money

No matter when you hope to retire, there are ways to help avoid outliving your money.

  1. Save more now. Contribute the maximum amount allowed by the IRS to your employer’s retirement plan and to any individual retirement account (IRA). If you’re age 50 or older, you may be able to make catch-up contributions, too.
  2. Plan to wait a little longer to collect Social Security benefits. For every year you wait past your full retirement age to elect benefits, you can receive more. Your monthly benefit can increase by about 8% per year, up to age 70.
  3. Plan to limit your retirement spending. Many financial professionals recommend that you tap no more than 4–5% (adjusted annually for inflation) of your nest egg each year, to help make your money last longer.

What’s next?

Setting and working toward a target retirement age isn’t easy, but we’re here for you. If you’d like to dive into the details with a financial professional, we’ll help you find one.