Want To Retire at 65? See if You Can Answer These Six Questions

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The U.S. is in the 'Peak 65' era — a four-year window from 2024 to 2027 that will see a record-breaking surge of Americans reaching retirement age. Around 4.1 million Americans turned 65 in both 2024 and 2025; another 4.1 million will reach that milestone in 2026, and 4.1 million more in 2027.

While 65 isn’t the Social Security full retirement age for many people, it is when Medicare kicks in, which is why some choose it as their retirement age.

But not having to worry so much about health insurance isn’t the only reason to retire at 65. After all, there’s more to retiring than health care.

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So before you trade the briefcase or commute for strolls on the beach or traveling the world, see if you can answer these six questions.

If you do, nothing is holding you back from retiring at 65. If you don’t, you may want to consider working a little longer or putting more focus on planning before you take the plunge.

#1 Do you know your sources of income?

When it comes to retirement income, there are several sources people draw from, including: tax-advantaged retirement savings accounts such as 401(k)s, IRAs and 403(b) plans.

There are also pensions, private investments and savings accounts. In addition to that, there is Social Security, annuities, dividends, real estate, and other income you may bring in. All of it is taken into account when deciding where to withdraw money from, when and how much.

Before you can figure out if you can retire at 65, you have to know how much you really have and where your income will come from.

#2 Do you have a cash flow withdrawal strategy in place?

Saving for retirement is important, but so is knowing how you’ll spend your money once you stop collecting a paycheck.

Without a plan, you could spend too much money in the early years of retirement, which may force you to change your lifestyle later on. Or you may be too frugal at the start and not healthy enough to enjoy it when you're older.

It's why Jung Seh, a financial advisor at Bogart Wealth, says it's so important to come up with a withdrawal strategy before you retire. “When you are thinking about retirement, you want to think about the income sources you may have,” says Seh. “You want to have a cash flow withdrawal strategy in mind.”

There are several withdrawal strategies you can employ depending on your approach to spending and saving.

For instance, there is the "Pay Yourself" rule of retirement in which you turn your income into a recurring paycheck; or the "Permission to Spend" rule, which gives you excalty that, the peace of mind that you have enough saved to indulge once in a while.

There are several other ways to withdraw money in retirement, including the "Common Man" rule, the "Die With Zero" rule and the "Best of Both Worlds" rule.

If you were born in 1960 or beyond, your full retirement age is 67. That’s when you can collect 100% of your Social Security benefits. If you collect at 65, you will receive a reduction in your monthly payout for your lifetime. That doesn’t mean you can’t retire at 65, but it does mean you should figure out your claiming strategy ahead of time.

“There are different Social Security strategies, and it depends on different variables,” says Seh. “Let’s say you are married and you are both retiring at 65, and your full retirement age is 67. How do you cover that gap between your retirement and when you start Social Security?”

Is it better to draw from another source and wait the two years before claiming Social Security, or to collect at 65 and have a reduction in benefits? Can you hold out until age 70 to get a bigger monthly payment? Those are questions you should ask yourself and answer before you retire.

#4 Have you considered the tax implications of your retirement income?

As you approach retirement, it’s important to think about how your taxes will change. While you may be in a lower tax bracket in retirement than in your working years, you could face taxable events depending on where your retirement income is housed and how you withdraw it. If you don’t have a grasp on the tax implications of retirement income withdrawals, it may hurt your cash flow.

If your retirement income comes from a traditional 401(k) or IRA, pension, annuity, short-term capital gains, bond income, or non-qualified dividends, it will be counted as ordinary income and you’ll need to pay taxes on it.

If the income is in a Roth IRA or Roth 401(k), the money is tax-free. If all of your money is in a traditional 401(k) or IRA, you’ll also have to take required minimum distributions or RMDs when you reach 73. Having a strategy to cover taxes and which accounts you’ll use to minimize your tax hit is an important part of your retirement planning, says Seh.

#5 Can you visualize your retirement?

Being able to afford your retirement is a key factor in whether you can retire at 65, but equally important is having an idea of what your lifestyle will look like when you stop working. If you don’t know what you’ll do, who you want to do it with, and if you can afford to do it, then you probably aren’t ready to retire, says Bobby Lovgren, head of wealth planning at RBC Wealth Management U.S.

“If a trip to France is on your bucket list and it's not something you can afford to do today, would it be better to delay your retirement until you have more income?” says Lovgren. Do you plan to work part-time when you retire and, as a result, won’t need as much lifestyle income?

It’s important to establish a wealth plan based on what your picture of retirement actually looks like, versus going in blind and hoping you can afford whatever you decide to do.

#6 Why not work two more years?

You’ve made it to 65; can you make it another two years to your full retirement age of 67? Waiting just two years allows you to claim full Social Security benefits while simultaneously shortening your retirement drawdown and extending your earning years.

If you are healthy, capable and have no reason to retire, ask yourself if you can last two or more years. Maybe a vacation or a sabbatical is all you need to keep going.

Or maybe two years is unnecessary. You diligently saved, you have a sound plan, your documents are in order and you’re good to go. Either way, before you retire, ensure you are truly ready. Returning to the workforce may be harder than you think.

Planning is the key to retirement happiness

Whether you amassed a big or small fortune for your retirement, the key to being ready at 65 is planning. That means figuring out how much you’ll need in retirement, where the money will be drawn from, and how you’ll support your lifestyle when you do stop working.

For some, it means using their savings, for others, it means continuing to work in a different capacity. For others still, it's a combination of both.

Either way, with a vision and a plan, you can make retirement at 65 a reality.

Donna Fuscaldo is the retirement writer at Kiplinger.com. A writer and editor focused on retirement savings, planning, travel and lifestyle, Donna brings over two decades of experience working with publications including AARP, The Wall Street Journal, Forbes, Investopedia and HerMoney.