Why Picking a Retirement Age Feels Impossible (and How to Finally Decide)

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Age is nothing but a number unless it comes to when you want to retire. While most people have an idea when they want to exit the workforce and start that next chapter, when it comes to an exact age, it gets a little fuzzier.

Many people don’t actually have a choice in the matter, even if they have a target age in mind. As it stands, the average retirement age in America is 62, which is earlier than many retirees plan for, according to a MassMutual survey (PDF).

The reasons why vary. For some, it’s due to a change in their employment, while for others, it’s simply because they could afford it sooner. Others face an illness or injury that forces them out of the workforce, while some hit a wall of burnout and a desire to finally relax.

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But for the workers who can control the clock, choosing an exact age remains elusive.

"It's hard because of the psychological nature of such a major life change," said Valerie Johnson, wealth planning manager at Axtella. "You have been working since high school or college, and you have never stopped and probably haven't really thought about what retirement means for you. It's hard to put a number on something you don't have a real specific goal for."

Reaching an exact retirement age requires significant mental and financial planning. But before you can do that, you have to figure out what’s holding you back from picking that date. Read on to see if any of these things ring true — and what you can do to get out of your head and start moving toward your retirement date.

What's holding you back?

Your job is your identity: For better or worse, many Americans tie their identity closely to their careers, making the thought of giving that up incredibly difficult. "The problem in society is you want to have purpose, and jobs give us that purpose," said David Blanchett, head of retirement research at Prudential. "It's difficult to let go when the time comes because there's this recognition that when you leave, you are probably not coming back."

Sure, you may be able to re-enter the workforce, consult, get a part-time job, or side gig, but the chances of returning to your previous role or maintaining the same salary are slim. That reality can cause you to hit the pause button on picking a retirement age out of fear you'll make a mistake.

You don’t have a plan: Everyone knows they’ll eventually retire, but if you don’t have a concrete idea of what you are retiring to, it’s hard to pick an age to call it quits.

Without a plan for how you’ll spend your time, where you’ll live, and how it will impact your family, picking a date feels arbitrary. "It’s difficult to choose an age when you haven't defined the lifestyle that goes with it," said Johnson.

You're concerned about the markets: The sequence of returns risk is a real fear, and it’s a big reason people put off picking a date. After all, you can't predict the future. This risk occurs when poor investment returns early in retirement — combined with your regular withdrawal — leave you with significantly less money to live on later. If you retire right as the market tanks, it can mean the difference between a comfortable retirement and a stressful one.

While you can't control the stock market, you can protect yourself by using withdrawal strategies like the bucket method. With this approach, you keep one to three years of cash set aside for short-term needs. That way, if the market dips during your first few years of retirement, you aren't forced to sell your stocks at a loss just to pay the bills.

How to get over it

Now that you know what’s holding you back, it’s time to get out of your head and start planning for the day you say adios to the office and hola to your next chapter.

To do that, Blanchett suggests approaching retirement like a professional athlete: try to go out on your own terms.

"Work until it's just over," said Blanchett. "The last thing you want to do is leave and then look back a few years and think I could have worked more or done more." At the same time, he said to look at what drives your lifetime satisfaction. If work isn't it, it may be time to retire and pursue what gives you that feeling.

It’s also vital to discuss the move with your spouse and run the numbers to ensure you’re financially ready to leap.

Johnson also suggests test-driving retirement before you fully commit. Try to figure out exactly how you’d spend your days; if you can, take some time off to see what a few weeks in the life of a retiree actually feels like, or even take a sabbatical. It won't give you the full picture, but it’ll give you a glimpse into your potential new reality.

A moving target is okay, too

Picking your retirement age isn't an exact science, nor is it etched in stone. In fact, Blanchett says it should be a flexible, moving target that you’re willing to adjust as life happens.

After all, the data show that the date people expect to retire is often very different from when they actually call it quits.

"It's really important to plan and have an idea, but it's also important to be flexible in how it unfolds so you have a choice," he said.

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.