Here's my humble take: Everyone should retire as early as humanly possible. No, that doesn't mean sitting around all day watching TV. You can still remain active or even (gasp!) get paid for doing something that's meaningful to you.
We humans are wired for connection and purpose. Often times, activities that give us these two things are classified as "work." But that's just a silly modern taxonomy; the bottom line is that work is way better when we don't need the money.
But not everyone can just follow his/her passions right off the bat. There are legitimate considerations that need to be made. Here are three basic rules to follow to pick your perfect retirement age.
1. Consider what your spouse will have after you're gone
Here's a key fact that every retiree needs to know: When you pass away, if your monthly Social Security check is more than your spouse's, they will forfeit their (lower) benefit in favor of your (higher) one.
There are several different scenarios to consider, which fellow Fool Dan Caplinger has tackled before. The most common is as follows: The husband tends to out-earn his wife, meaning that he'll have a higher Social Security benefit. However, the husband will -- statistically speaking -- pass away before his wife does. This means that his wife will likely assume his benefit.
In this scenario, the couple needs to carefully consider what resources will be available if one of them passes away. Often, it makes the most sense for the husband to wait as long as possible to claim Social Security -- up to age 70 -- in order to make sure his wife is getting the biggest benefit possible.
But -- and this can't be said enough -- every situation is different. The key is to have open, honest, and informed conversations with your spouse and a financial planner to choose the path best for you.
2. Practice your retirement budget
The simple rule of thumb that many financial planners suggest is to aim for replacing 70% to 80% of your pre-retirement income. This income will often come from a three-pronged stream that includes your nest egg, Social Security, and a pension or other form of income like part-time work or rental income from real estate.
In order to prepare for retirement, it's important to practice living on your assumed budget. I suggest doing so as early as possible for two reasons: First, if you find it untenable to go through daily life on a budget below what you'll be able to provide, that's important feedback that you either need to start earning more immediately...or start preparing for a different existence post-work.
On the flip side, if you decide to focus intently on discovering what your level of enough will be in retirement, you might find that your annual expenditures are far lower than you would have thought. In such a scenario, you might be able to retire far sooner than initially thought.
3. Make sure you've got over three "core pursuits"
Wes Moss, chief investment strategist for Capital Investment Advisors and host of the Money Matters radio program, has done the research on what it takes to be happy in retirement. One of the keys is core pursuits, or activities that are intrinsically rewarding and help give you purpose and meaning. That could be coaching, hiking, gardening, volunteering, or writing for The Motley Fool. It doesn't really matter what it is; it is whether or not it feeds your soul that matters.
I use the above image very intentionally. That's because Moss has found that unhappy retirees often have less than two core pursuits when they enter retirement, while happy retirees have 3.6.
The key here part of that is the "when they enter" part. In other words, if you are a slave to your job and have not taken the time to develop other parts of your life, you'll be too late by the time retirement comes around. So as you consider the right retirement age to pick, take into account the fact that you'll need to start developing those pursuits before you retire -- and ideally, right now -- to make sure they're there for you when you call it quits on work.
While every retirement is different, I think couples that follow these three rules should find it much easier to pick the perfect retirement age.
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