When I set my retirement savings goals, I anticipated claiming Social Security at the age of 62 -- which is the earliest age available. I also planned to start spending down my savings at the age of 62.
That's not because I can't wait to leave my job -- in fact, I love what I do, and I hope to continue doing it until the ripe old age of 90 or so. But despite my desire to keep working as long as my employers will have me, I've made the calculated choice that planning and preparing for early retirement is the best move.
No one ever regretted planning to retire early
Deciding when you plan to retire is one of the most important choices you'll make when setting your retirement savings goals. There are three primary reasons for that.
First, if you'll claim Social Security when you leave the workforce, your chosen retirement age will determine the size of your checks. Second, your planned retirement date will also set a deadline for hitting your savings goals. And third, it will determine how long your retirement nest egg must support you for. After all, if you plan to work until 70 rather than retire at 62, you'll have a decade more to save, your Social Security benefit checks will be substantially larger, and you'll rely on your investments for 10 fewer years.
While I'm hoping I'll be able to work until long past 70, I also know the decision about exactly when I'll retire is very likely going to be beyond my control. Despite my best intentions, it's possible I won't be able to continue to work for so long. In fact, many things could happen that prevent it, from a lack of job opportunities in the future to health issues to obligations to my family, such as caring for parents or in-laws who will (hopefully) be in their early 90s by the time I hit that age.
If I happen to get forced out of the workforce earlier than I'm hoping, as many Americans do, it will probably be because of stressful circumstances. After all, health issues and involuntary unemployment aren't fun. And the last thing I want to do in that situation is to add financial worries to the picture.
I won't have to think about that if I set my retirement goals based on leaving the workforce at 62, since I'll have set aside enough money to support myself -- even if I also end up having to start taking Social Security early and accept lower benefits as a result.
The bottom line is that if I were to base my retirement goals on a later retirement, I could easily end up with too little money and a lot of financial regrets if things don't work out as planned.
But if I make sure I'm ready to quit work by 62 with a nest egg that can support me for the rest of my life, the worst that happens is that I get to pad my bank account with some extra money to enjoy later. And I much prefer that to be my worst-case scenario, rather than an early retirement with too little money in the bank.