The short answer is that you can retire whenever you want, but considering how much financial comfort and stability you want to have is a more useful way to approach your decision. There’s no correct age to retire. The decision to retire depends on factors like your lifestyle goals and financial capability. The official age of retirement is 60 (58, if you’re in the private sector), however, nowadays people opt to retire early to make the most of the new opportunities life offers. How does one decide the right time to hang up one’s boots?


Hitting the legal sealing

According to the law of land or institution, a person working in a private company should retire by the age of 58 and a government employee should retire by the age of 60. If you have reached your retirement age which is specified by the law of your country, then you have no option but to retire.

Life purpose

Self- actualization theory relates to the achievement of one’s highest potential. According to Abraham Maslow, developer of the self-actualization theory, there are four basic human needs – physiological, safety, love and belongingness, and self-esteem. Once a person achieves these, he/she aims for the realization of the best that he/she can be, do and have.
If you feel you have reached a peak and want to devote time to yourself or want to help others, then you can retire early.

Financial security

To retire comfortably, you need to have enough net worth. This means greater assets than liabilities such as loans and recurring bills. If you have multiple streams of income such as income from rental property, a small business, etc. then retiring is a good decision.

Talking about financial security, before calling it quits you should clear all type of loans, as in retirement you won’t have a regular flow of income and will have to use your savings or investments. Hence, paying off your loans is a must.

Career Goals

The average age of top corporate executives is much lower than the previous generation. If you have achieved your desired goals in terms of climbing the corporate ladder, you may want to explore other opportunities, either as a consultant or mentor. The gig economy today offers unprecedented flexibility and variety in terms of projects. The pay is also worthwhile. Retiring early to gain control over work-life balance is also a key reason why people retire.

Family Goals

If your children have grown up and are financially independent, you can consider retiring early. However, the decision to retire must consider future life goals such as children’s education and marriage. To maintain your financial independence and support the costs of major life events, you need a long-term perspective and financial discipline.


How much do you need to save for retirement? It’s one of the most common questions people have. And no wonder. There are so many imponderables: When will you retire? How much will you spend in retirement? And for how long?

Let us take a simple example. If one’s average monthly expenditure at the age of 40 is Rs.50,000 (Rs.6 lakhs per annum), the same after 20 years or at 60 years of age is likely to touch Rs.1.33 lakhs ( Rs.15.92 lakhs per annum) assuming a 5% inflation rate. This expense at the age of 70 and 80 years would be Rs.2.16 lakhs and Rs.3.52 lakhs per month. While these numbers may look astronomical today, they would look normal 30-40 years later as inflation would catch up. As per basic retirement calculations, one would need a corpus of approximately Rs.2.5 crore at the age of 60 years to survive the next 30 years (life span of 90 years) assuming a 10% rate of return on the corpus and a 5% inflation rate for expenses. One may dispute the life span of 90 years but looking at the advancement in medical technology, it looks realistic.

The table below illustrates how a retirement corpus of Rs.2.5 crore could be built with small monthly SIPs (Systematic Investment Plans) in mutual funds provided one starts early.

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The table indicates that the later you start the bigger the SIP amount required. In fact, the SIP amount almost doubles with every 5 years of delay to start your investment. It is therefore imperative for investors not to miss out on retirement planning and start saving through SIPs at the earliest. When it comes to retirement, remember this proverb, ‘You can be young without money but you can’t be old without it.’

Avoid outliving your money

Whatever your age when you decide to retire, you don’t want to worry about outliving your money. Luckily, there are ways to help avoid it.

Budget for now and the future

Saving is always important, even after you’ve retired. In your budget, allot funds for savings. Try to build a solid emergency fund that could cover at least 3 months of your expenses in your savings.

Consider some guaranteed income

Talk with a financial planner about setting up guaranteed income, perhaps part of your retirement savings through a tool like a guaranteed annuity income. This way, you’ll still be generating income, even in retirement.

Invest wisely

At this point in life, you’ll want to make less risky investments than you did when you first started working. But you’ll still want to invest. You can get a much higher return on investment by investing in stocks compared to waiting for a savings account to grow.

Understand how much you’re spending

Look at your spending over the past 3 months, using your banking statement. If you primarily use cash, write down what you think you spent on purchases. Start keeping a spending diary so you get an accurate view of your expenses.

Trim your lifestyle and spending

Take a look at your purchases over the past few months. Identify spending habits that you can eliminate. It might be a membership you don’t use anymore, or maybe you start cooking more meals at home instead of going out to eat as often. Keep a diary to track your spending. Note extravagant purchases and see ways to save.

Stay healthy

One of the easiest ways to save money is to prioritize your health. Preventive care is a big money-saver. The Centers for Disease Control and Prevention recommends that adults ages 50 years and older get at least 150 minutes of moderate-intensity aerobic activity a week, plus at least two strength-building sessions a week.