Planning for Retirement at 62: 5 Essential Steps for Gen Xers
Are you a Gen Xer thinking about retiring at 62? With the oldest members of Generation X approaching 60, many are starting to consider their retirement options. However, between financial obligations like student loan debt, credit card debt, caring for aging parents, and helping children pay for college, retiring comfortably may seem out of reach. But fear not, there are steps you can take to make retiring at 62 a reality.
First and foremost, make sure you can afford healthcare. The average 65-year-old couple retiring in 2024 can expect to spend $315,000 on healthcare costs throughout their retirement. Since Medicare doesn’t kick in until age 65, if you plan to retire at 62, you’ll need to account for the costs of a private health insurance plan.
Additionally, understand that you may be sacrificing some of your Social Security income by retiring early. Your benefit could be reduced by as much as 30% if you don’t wait until Full Retirement Age, which is 67 for Gen X. Consider waiting until age 70 to receive a boost in your benefits.
It’s also important to consider all costs, especially with recent inflation rates on the rise. Food prices have increased by as much as 25% since 2020, so it’s crucial to plan for potential price increases in the future.
To ramp up your savings, take advantage of compound interest by investing regularly. If you’re in your mid-40s, you still have time to build a substantial nest egg by contributing to an investment account. Consider increasing your contributions if you’re older and planning to retire at 62.
Lastly, think about how you’ll spend your time in retirement. Planning for retirement is not just about finances, but also about how you’ll stay engaged and fulfilled. Consider starting a side gig or passion project to supplement your income and keep yourself busy.
Retiring at 62 is a feasible goal for many Gen Xers, but it requires careful planning and consideration. By following these steps, you can set yourself up for a comfortable and fulfilling retirement.
