How Much Money Do I Need To Retire At The Age Of 60?

Every retired person’s financial needs will vary according to the various differences in their retirement plans, healthcare, location, source of income, and other considerations. However, regardless of your specific circumstances, there are certain crucial financial aspects to consider when calculating how much you'd need to retire at 60. "How much do I need to retire at 60?" is the first and foremost thing people think about while retiring at the age of 60. However, without a proper plan, analyzing the corpus you might need to save in order to have a fulfilling retirement.

How Much Money Do I Need To Retire At The Age Of 60?

Everyone has different financial needs when they are about to retire. Someone might totally be dependent on their retirement pension plan while somebody might be having a source of side income after retiring or might be having a side hustle. So it depends from person to person on what their post retirement priorities are and how much money that they have saved for it. While there are many factors which determine the amount of corpus you need to retire at the age of 60,  read more to know the basic factors. 

1. The Corpus Amount From Your Retirement Savings

With that figure in mind, examine your retirement plans, including travel, upsizing or downsizing your living space, and taking up other activities, as well as any associated expenditures or savings. Then figure out how much you can afford to withdraw from your retirement savings each year. You may decide to withdraw only a portion of the potential growth of your investments each year in order to maintain the principal over the term of your retirement. If you have diversified your retirement income, you may prefer to boost or even maximise withdrawals from one or more of your accounts.

2. The Taxes On Your Retirement Corpus

Unfortunately, retirement does not exempt you from paying taxes. If you have tax-deferred retirement accounts, such as a standard retirement account) or an individual retirement account (IRA), any withdrawals will be taxed as ordinary income. And, once you reach the age of 70 you must begin taking annual required minimum distributions (RMDs) and paying ordinary income tax on those distributions. This means that the amount of money in your tax-deferred accounts does not accurately reflect your spending power because a portion of it is effectively allocated for the government.

3. The Social Security Benefits Provided By Your Employer

Retired people are not eligible for Social Security until they reach a specific age. In particular, the earliest you may begin receiving Social Security retirement benefits is age 62, which means you'll need to plan for at least two years of retirement income without the assistance of Social Security if you retire at 60. It's also important to remember that Social Security benefits are never guaranteed. However, you should consider delaying your application for Social Security even longer because your monthly benefit amount is permanently cut by up to 30% if you take benefits before reaching your full retirement age, which is generally between 60 and 65 depending on the year you were born.

Take Away

Though the financial information of retirement will vary from one early retiree toward the next, everyone who decides to change the workforce and enjoy the next chapter of life at the age of 60 should think about their retirement funds, taxes, Social Security, and health care costs before making the leap. Consider consulting with a financial advisor to develop a retirement strategy that aligns with your financial objectives.

Also Read: How Do I Create A Retirement Plan?

Planning For Your Retirement? Consider These Factors NOW

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.