Choosing the age at which you finally retire is one of the most important decisions you'll make, but it can be a difficult question to answer.
What you don't want to do is pick an age that sounds good without doing any research, because choosing the wrong one will affect you for the rest of your life. Retire too early, and you risk running out of money too soon. Or if you wait too long, you could reach the end of your life with regrets.
There's a science to choosing the best retirement age for you, and it starts with these three factors.
1. How much you have saved
If you have a hefty retirement fund, you can afford to be more flexible in choosing when to retire. But if you have little to no savings, you might have no choice but to work longer to give yourself more time to save.
There's no set guideline as to how much you need to save for retirement. The average worker expects to need around $1.7 million to retire comfortably, according to a survey from Charles Schwab, but some people will need more or less than that depending on their spending patterns and plans.
The best way to see whether you're on track is to run your numbers through a retirement calculator. Input your desired retirement age, then see how much you'll need to save each month to leave work at that age. If that goal is unreasonably high, try it again with a different age to see if that target is within reach. You might still need to boost your savings each month, but setting a realistic age can also make it easier to achieve your goals.
2. How long you expect to live
Nobody can predict exactly how long they'll live, of course, but estimating your life expectancy can help you choose a retirement age. Look into your family history to see if there are any trends, then take an honest look at your own health.
If you're in the best shape of your life and nearly everyone in your family has had long lives, you can probably expect to enjoy a long retirement. In that case, you might choose to delay it by a few years to give yourself more time to prepare. On the other hand, if you're battling health problems or certain illnesses or diseases run in your family, you might want to retire earlier to give yourself as much time as possible to enjoy your senior years.
Additionally, think about how your health will affect your ability to continue working. Nearly 40% of retirees said they were forced to retire earlier than they expected, according to a report from the Aegon Center for Longevity and Retirement, and the number one reason for leaving the workforce early was health problems. If you're currently facing health issues or are at a high risk of developing health problems, it's a good idea to save as much as you can now just in case you're forced to retire early.
3. What age you want to begin claiming Social Security benefits
Social Security benefits are a crucial aspect of retirement for millions of Americans, and while you don't necessarily need to retire and begin claiming benefits at the same time, the two often go hand in hand.
The age at which you begin claiming benefits will affect how much you receive each month for the rest of your life. By claiming at your full retirement age (FRA) -- which is age 67 for those born in 1960 or later or either 66 or 66 and a few months for those born before 1960 -- you'll receive the full benefit amount you're entitled to collect. File for benefits before your FRA (as early as age 62), and your checks will be reduced by up to 30%. But if you wait until after your FRA to claim (up to age 70), you'll receive your full benefit amount plus up to 32% extra each month.
Consider what age you want to begin claiming benefits; then think about how that will affect your retirement age. If you want to delay benefits to earn bigger checks, for example, you might also want to hold off on retiring. Or if you're eager to start collecting benefits as soon as possible, you might decide to retire early.
Deciding on a retirement age is a critical component in planning for the future, so it's not a decision to be taken lightly. The more thought you put into this choice, the better off you'll be in your senior years.