There's no such thing as an official retirement age in the U.S. As such, workers can opt to stay in the labor force for as long as they choose, or as long as their health allows.
You may, however, have your sights on retiring at age 65. And that's not necessarily a poor choice. But if your plans have you wrapping up your career at 65, here are a few things you should know.
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1. You'll be eligible for Medicare, but it might be more expensive than expected
Age 65 is when you're first entitled to coverage under Medicare. If your health insurance is tied to your job and you retire before age 65, you might have to scramble to pay for health coverage -- whereas if you wait until age 65, you'll have Medicare to fall back on.
That doesn't mean health coverage will be inexpensive or free, though. There are many costs you might incur as a Medicare enrollee, from monthly Part B premiums to deductibles to coinsurance. Research your costs ahead of retirement so you know what to anticipate.
2. You won't be eligible for your full monthly Social Security benefit
You're allowed to sign up to collect Social Security once you turn 62. But you're not entitled to your complete monthly benefit based on your personal wage history until you reach full retirement age (FRA). That age is either 66, 67, or somewhere in between, depending on your year of birth.
If you claim Social Security at 65, your monthly benefit will be permanently reduced. And that's something you may not want if you don't have a ton of retirement savings.
You should also know that delaying Social Security past FRA could result in boosted monthly benefits for life. So if your savings leave much to be desired, you may want to consider going that route.
To be clear, retiring at age 65 doesn't not automatically mean claiming Social Security at age 65. But many people do inevitably claim Social Security in conjunction with leaving their jobs and losing their paychecks, so it's important to understand the financial implications of filing for benefits at 65.
3. You may want to work longer to grow or preserve your savings
In 2022, the typical American aged 65 to 74 had a median $200,000 in retirement savings, according to Motley Fool research. If your savings are in similar shape, you may want to consider working beyond age 65 -- especially if you're in good enough health to do so and you actually enjoy your job.
If you apply the 4% rule to a savings balance of $200,000, you're left with roughly $8,000 a year in income. Now that may be on top of Social Security. But even so, it's not a ton of money.
Extending your career into your late 60s could give your nest egg a nice boost. Just as importantly, it could allow you to leave your savings untapped for longer so that money has more staying power.
It's exciting to think about turning 65 and bringing your career to a close. But if you're set on retiring at 65, make sure you understand what that means from a Medicare, Social Security, and savings perspective.
