AGE 55 WITH APPROXIMATELY 15 YEARS OF SERVICE.I have a 401K.
Rich and Rod have really good points. But the question I always ask my clients who are retiring, either young or old, what will you do next with your time. There are many studies available, and I've seen it in clients, where they retire because they can't stand their job or just want something new, and then are quite lost because they didn't think about the next phase of their life. Perhaps you have already mapped out the plan for the next half of your life and I applaud you. If not, take some time to reflect.
Next, determine how much you will need to pay for the new life style. You likely have several more decades ahead and you need to ensure your funds will last. For example, have you planned for the high cost of health care? It can quickly become your largest expense.
I'd suggest you sit down with fee-only financial planner. They can help you identify your goals and then put together a plan to determine if your 401k and other assets are sufficient to fund the retirement you seek. Always find someone whose fiduciary responsibility to you. This means they must act in your best interest above all others, including their own. You should ask them to put it in writing. You can find a fee only planner at NAPFA and Garrett Planning Network. (Full disclosure – I am a member of both.)
Andy Tilp, CFP ®
Trillium Valley Financial Planning, LLC
Well, that's a very broad question. I suppose you can retire at any age, with enough money to support you. A friend of mine retired at age 37. But, I assume you're asking at what age you can reitre with the most 401k and Social Security benefits.
The earliest you can claim for Social Security Retirement Benefits is age 62. You should be receiving statements annually that let you know what your benefit should be for "Normal Retirement Age", which in your case will be age 66 1/2. Alternatively, you can claim a partial benefit at age 62.
As for your 401k, yes, you can take it at any time... but, with a penalty... unless you are age 59 1/2 or over. You'll always incur federal and state income tax on those funds you withdraw on the 401k, but you'll also forego about 30% in Social Security Benefits by taking "early retirement" at age 62.
As such, I would highly recommend you to find a reputable fee based Certified Financial Planner in your area to assist in figuring out what your goals are; your needs, wants, and wishes for your retirement years... and, to determine how much money that is going to take. Retirement is the longest "vacation" you'll ever take, but the one most people spend less time planning for than that big week at Disney with the kids.
Seek professional help.
Best Regards, and Good Luck
Edward, You can retire at any time as long as you have sufficient savings and/or sources of income to sustain you throughout the remainder of your life in retirement.
That said, there are specific rules and tax laws that govern your ability to withdraw funds from your retirement prior to age 59 1/2 without penalty. If you leave your job at age 55 or older, you can take withdrawals from your 401K plan without any penalty. However, if you have money in a previous employer's 401K plan, distributions from that plan would be subject to an early withdrawal penalty, unless taken under IRS Section 72T. Section 72T allows early withdrawals if taken under a periodic withdrawal schedule that's similar to annuitizing your retirement plan. However, the rules are rigid and there are penalties for failing to follow the distribution schedule.
Being over age 55, you can retire today and take withdrawals from your current employer's 401K plan without penalty, should doing so be appropriate an in your best interests.You can also roll the money from your current employer's 401K plan into an IRA, after you leave your current job. If you have company stock in your 401K plan, you should discuss potential NUA-related tax-saving strategies with a financial advisor before you do anything. If you're not sure about what to do, you might want to consult with a financial advisor before doing anything. Feel free to ask follow-up questions.
Edward, You have received some good advice from Rod, Rich and Andy. It looks like you have been with your company for 15 years so you should be full vested in your 401(k). I would make sure that you are not leaving money behind in your 401(k) by retiring early. I also echo that you should sit down with a fee only investment advisor to review your situation. They will be able to help your define your goals and objectives and answer your question of when it makes sense to retire. Andrew Comstock, CFA Castlebar Asset Management, LLC
As the other advisors have pointed out, you can retire at any time as long as you have sufficient savings and/or sources of income to sustain you throughout the remainder of life. Retirement is a needs based analysis and we would need to look at your entire financial picture……how much you have saved, retirement income, social security benefits, pension if you have one and how much you spend. With regards to your 401(K) account there are various rules that apply that are outlined in your plan’s Summary Plan Description. Your company’s plan document will address age restrictions and any potential taxes and penalties. If you would like to discuss your personal situation you can call us at 415-345-8185 or email email@example.com.
Disclosure: The posted information is for informational purposes only. This message does not constitute an offer to sell or a solicitation of an offer to buy any security. All opinions and estimates constitute Karp Capital's judgment as of the date of the report and are subject to change without notice. Accordingly, no representation or warranty, expressed or otherwise, is made to, and no reliance should be placed on, the fairness, accuracy, completeness or timeliness of the information contained herein. Securities offered through Financial Telesis Inc., member SIPC/FINRA. Financial Telesis Inc. and Karp Capital Management are not affiliated companies.