Deciding when to retire is one of the most important decisions facing workers in their 50s and 60s. Your decision will significantly influence your financial security, health, and life satisfaction for the rest of your life. It’s a serious decision that only you can make—nobody else can tell you the best age at which you should retire.

Let’s look at the important considerations for deciding when to retire, ages when Americans typically retire, and the pros and cons of retiring early vs. late. Let’s start by asking a key question.

What’s your definition of retirement?

It’s important to realize that people define “retirement” differently. The traditional definition of retirement is to stop working altogether. It’s an all or nothing decision—either you’re working or you’re not.

Nowadays, however, many people express a desire to continue working in some fashion while they’re in their 60s. “I want to retire when I’m 62, then I’ll work three days per week,” a physician friend of mine recently told me. Working during their retirement years is a goal that’s shared by three-quarters of American workers, as reported in the EBRI 2023 Retirement Confidence Survey.

As a result of this desire to continue working in some fashion, some people have an evolved definition of retirement—they think of it more as improving their life by transitioning from working full time to working part time as long as they are able and still enjoy working.

Working part time for a few years after you stop working full time has a significant benefit. It can significantly improve your retirement finances. For many people, that can be a very desirable and necessary goal.

The age at which Americans typically retire

An internet search for the average age of retirement in the U.S. produces widely different results. For example, a recent Gallup poll reported age 61 as the average age of retirement. Yahoo Finance reports age 64 as the average retirement age across America, but the average age varies significantly by state.

The 2023 Retirement Confidence Survey reports age 62 as the median age at retirement for current retirees. However, one in three current workers report that they want to work until age 70 or beyond, while a little more than one in 10 (11%) report they want to retire before age 60.

One reason for these differences is that surveys rely on people self-reporting when they retired, and they depend on the respondents to define “retirement.”

Consider your financial security

Ideally, you’d retire when you’ve determined that you can be financially secure and you’re convinced that retirement will truly improve your satisfaction with life.

To be financially secure throughout retirement, you’ll want to build a portfolio of lifetime retirement income that covers your expected living expenses for the rest of your life, no matter how long you live. It’s doable, but it’s a complex task that deserves your time, attention, and possibly some money to pay a retirement planner. The skills needed for this task are often beyond the expertise of most American workers, so you might need help from a qualified retirement planner.

You’ll also want to develop strategies to protect against common retirement risks, including inflation, stock market crashes, poor health, and the threat of high expenses for long-term care.

Be clear about how retirement can improve your life

Additionally, you’ll want to be clear about your reasons to retire. Many people have negative reasons that push them into retirement—they don’t like working, they’re bored with work, they got laid off, or they experience a health shock. While these are legitimate reasons that can influence your decision to retire, for the best outcomes, you’ll want to build a positive vision of your life in retirement that can pull you (instead of push you) toward retirement.

To do that, think through the various reasons you want to retire and how retirement will make your life better. Doing so will help you choose the retirement age that makes the most sense for you.

Pros and cons of retiring early

For the purposes of this discussion, let’s define early retirement as retiring before age 65, which is commonly thought of as the normal retirement age.

The pros to retiring early are fairly obvious:

  • You no longer have to work, commute, or wake to an alarm clock.
  • You have more time to travel, pursue your interests, and take care of your health.

The cons are more subtle:

  • Retiring early can significantly and permanently reduce your lifetime retirement income.
  • Medical insurance can be very expensive before you reach age 65, Medicare’s eligibility age.
  • You might miss the challenges of your work and the social connections you’ve made through your job.

Pros and cons of retiring late

For this purpose, let’s define late retirement as retiring after age 65. The pros and cons for late retirement tend to be the opposite of the pros and cons for early retirement. Pros include:

  • Delaying retirement can significantly and permanently increase your lifetime retirement income.
  • The premiums for medical insurance are lower, since you’ll be eligible for Medicare.
  • You might enjoy the mental stimulation of work and the friends you’ve made there.

The cons include more years working and fewer years traveling, pursuing hobbies, and taking care of your health.

Retiring late can appeal to people who are healthy and have a reasonable expectation for a long retirement.

There’s an ongoing debate in the longevity research community about whether retiring late might increase or decrease your lifespan. One conclusion from research shows that you might improve your lifespan with “good work”—work that’s stimulating, isn’t stressful, gives you social contacts, and helps improve your finances. On the other hand, you could potentially shorten your lifespan with “bad work”—work that’s stressful, physically demanding, and/or bad for your health.

As you can see, there are many considerations for deciding when to retire. And it’s not always an independent decision—couples, for instance, should discuss the considerations for when to retire with their spouse or partner. Close family and friends can also offer important insights.

Don’t fall for societal expectations that tell you it’s time to retire when you hit a certain age. Instead, spend some time seriously considering your own situation. It’ll help you make the right decision for you. Remember, the rest of your life is at stake.