Retirement Age: It’s Just a Number

By Chris Duderstadt

April 10, 2023

Retirement Age: It’s Just a Number

Key Points – Retirement Age: It’s Just a Number

  • Misconceptions About Certain Retirement Ages
  • What Are Your Retirement Goals?
  • You Don’t Need to Wait Until Retirement to Live a Retirement Lifestyle
  • The Purpose of a Financial Plan
  • 14 Minutes to Read | 23 Minutes to Listen

Retirement Age: It’s Just a Number

Did the headline of this article catch your eye? Don’t get us wrong. We take retirement planning very seriously. The point of this headline and article is to explain that you don’t need wait until a certain age to retire. Many people think that they need to wait to retire until 65 when they become eligible for Medicare or when they reach full retirement age for Social Security.

With the proper planning, you may be able to retire earlier than you might think. But you won’t know that without having a financial plan. Dean Barber and Logan DeGraeve will expand on that to highlight why retirement age is just a number on America’s Wealth Management Show.

A Different Way of Looking at Retirement

The 35-plus year Dean has spent in the financial services industry has taught him a little more than a thing or two about how to plan for retirement. It’s also taught him a different way of looking at retirement. He likes to think of retirement as achieving financial independence. Financial independence is the day that you’re getting up and you’re doing whatever you want to do because it’s what you want to do. It’s no longer about the need for a paycheck.

“It’s when you know you have enough money to live the rest of your life the way you want to live it without fear of running out of money. Do whatever you want to do. If you want to keep working, keep working. If you want to do whatever it is that you want to do, then go do whatever it is that you want to do. We need to get people to financial independence so that everything is being done on their own terms.” – Dean Barber

So many people don’t realize that they’ve achieved financial independence because they think that they need to work until 65 when they can get on Medicare or 66 and 10 months since that’s their full retirement age for Social Security.

“How many times do we sit down with someone that thinks they have enough to retire but also thinks that they can’t retire until they’re 65? I’ll ask them why they think that. And they’ll say because of Medicare. I’ll point out that it’s a cost, but you can plan for it. There’s no retirement age timeframe of when you need to retire or be financially independent.” – Logan DeGraeve

Some People Know They’re Financially Independent, But Keep Working Anyway

Realizing that you’re financially independent can also be hard to see or acknowledge for someone who truly enjoys their job. For some people, their whole identity is tied to their work. This made Dean think of one of his clients who is 74 and is still working because he loves his job.

“It was eight or nine years ago when I sat down with him and went through the numbers. I told him that if he’s working, it’s because it’s what he wants to do. He looks at me and said, ‘What you’re telling me is that I already won the race. What am I still running for?’ That’s exactly right. He said he didn’t think he could quit, so I said that anytime he wants to, he can.” – Dean Barber

If you’re one of those people who thinks that they might be running the race to retirement but don’t have a good idea of where you’re at, we encourage you to review our Retirement Plan Checklist. Our Retirement Plan Checklist consists of 30 yes-or-no questions to gauge your retirement readiness and age-and date-based timelines of things you need to be aware of that can impact your ability to retire. Download your copy below!

Download: Retirement Plan Checklist

You Don’t Need to Wait Until Retirement to Do the Things You Want to Do

Those that do retire and don’t know what they’re going to do in retirement are the ones who really struggle. You need to determine what you’re going to do in retirement around five to 10 years before you retire. Someone who is financially independent at 55 but really enjoys their works and wants to work until 65 doesn’t need to hold off on doing the things they want to do.

“For instance, Dean has a house at Table Rock Lake. He loves going down there with his family. If he would’ve waited for retirement to buy that lake house and go down there, he would’ve missed out on so many memories with his family and friends. I always say that the most precious commodity we have is time. That doesn’t mean you need to stop working, but it doesn’t mean you need to delay what you want to do in retirement.” – Logan DeGraeve

There are so many people that think they can’t do all the things they want to do until retirement. That’s why we take people through our Guided Retirement System and define what financial independence means for them. And when we do that, we want them to know that they can retire then and there without saving another dollar.

“If you don’t want to leave the workforce and go into full-on retirement, let’s talk about what you would like to have happen over the next five years or however long it is before you’re going to leave the workforce. You don’t need to save any more money. If you save more money, that means you can spend more in the future. So, would you rather do more today or during your retirement years?” – Dean Barber

What Does Your Retirement Lifestyle Look Like?

However, there some people are presented with a good problem to have when they’re asked that question. Those are the people who are financially independent, but don’t have a lifestyle that will have them spending a lot. Therefore, a lot of their money would be passed down to their kids or whoever their beneficiaries are. Some people might be comfortable with leaving a lot of money behind, but for others, not so much.

The big thing to remember with retirement age is that everyone has their own story. Just because your friend or family member retired at a certain age doesn’t mean that it should be your retirement age as well. And if you’re financially independent and don’t absolutely love your job, you don’t want to wait to retire. Like Logan said, time is our most valuable commodity and you can’t get time back.

“I think there’s a difference between retiring and doing nothing and living the life that you want to live. Most people who are in their late 50s or early 60s have earned the right where they work to have significant time off. What are you going to do with that significant time off? You can treat it like retirement. If you want to take a cruise or family vacation and you were going to wait to do it in retirement, why not do it now?” – Dean Barber

People Can Get Stuck in Thinking That You Need to Wait to Retire at a Certain Age

Retirement age is a psychological thing for a lot of people, but we don’t want you to be one of them. You get into the position you’re in today by hard work and saving for retirement for 30-35 years. It can be hard to get out of that mindset.

That’s why you need a financial coach (AKA a CFP® Professional) that can give you the clarity and confidence to take a trip, buy a second home, etc. through the fluid, forward-looking plan that they build for you. They’ll show you the math behind it within the financial plan to show you that you’re OK. And if you’re not OK, they’ll make the necessary adjustments within your financial plan so that you will be OK.

The best way that Dean can explain that retirement age psychology is by telling a story about another client of his. Dean has worked with this client for several years. He was very successful in their career, did a great job of saving, and understood the capital markets, the tax system, etc. He and his wife were in their late 60s and it was very clear that they would never run out of money with spending in the way that they were.

Family Financial Planning

In fact, the nest egg that they had built was going to keep getting larger. That would be passed on to their two daughters and then to their grandchildren.

“We had a really long conversation one day and I asked them if they would rather let their nest egg get bigger and bigger and leave their children and grandchildren a chunk of money after they pass on or would they rather give from warm hands and start a gifting program for them today. That way, they could witness their children and grandchildren could do with the inheritance. He never thought that they would have that conversation.” – Dean Barber

Once the client had that understanding, Dean helped him figure out how much he and his wife could gift each year without having any adverse effect on their retirement. They started the gifting program and told Dean last year that it was one of the most amazing things he had done for him.

“He said that the things that they were witnessing their kids and grandkids do and how they’re involving us in it is priceless. They thanked me for allowing them to see that they could do that.” – Dean Barber

The Clarity That Comes from a Financial Plan

The gifting program that the client created wouldn’t have been possible without the clarity received from his financial plan. And even if he already had a hunch that he had enough money to start that gifting program, how is he supposed to know where to get the money from without the financial plan? If he pulled all that money out of an IRA, that would cost him a whole lot more.

“People come to us and they have this stuff—401(k)s, Social Security, pensions, etc. It’s our job to figure out how to make that stuff work for them in the most tax efficient manner.” – Logan DeGraeve

Remember that it’s only the money after tax that you get to enjoy because Uncle Sam is going to get his share. We want to make sure that you’re getting to enjoy as much of your money as possible.

What If You Retire Before 65?

Let’s say that you decide that your retirement age is going to be age 60. There is most likely going to be a medical premium cost. So, determine what that is and plan for it. There are certain ways that you can plan for that in advance and know that you’re going to keep your taxable income very low for a few years before turning 65 so your premiums won’t be very expensive. You can qualify for the ACA credit.

Let’s say that you’re 50 and working with a CFP® Professional that works alongside a CPA, which is what you should be doing. You would love to retire by 60 and do whatever you want to do, whenever you want to do it. However, you’re worried about the medical cost. What do you do?

“Apply the asset allocation, tax allocation, asset location, and withdrawal strategy into this. You build a big enough bucket of money in an account that’s already been taxed so that when you spend from that account, it’s not causing your taxable income to go up because you’re spending part principal and part interest. You can keep your income low enough so you can qualify for the ACA credit prior to 65 and your insurance premiums are very low. But if all did was pile all your money into a tax-deferred 401(k), it won’t work.” – Dean Barber

That’s why it’s critical that people don’t wait to start retirement planning until a year or two before their desired retirement age. The earlier that someone starts working with a CFP® Professional and CPA, the more control they’ll have, especially as they enter retirement.

How Much Do You Need to Retire?

There’s another question that probably entered your mind immediately after thinking about retirement age as well. How much do you need to retire? The answer to that is different for everyone because everyone’s plan is different.

That Depends on Your Retirement Lifestyle

We have clients who maybe have $5-6 million and they still think they don’t have enough. On the flip side, we have clients who have $700,000 and that’s enough for them. Again, it depends on what you want your retirement lifestyle to look like. What are your goals for retirement? If you haven’t defined how much is enough or what you want to do, you’re never going to know if you have enough.

“You need to start with knowing what you want your life to look like. If you understand what you want your life to look like, then you can apply dollars and cents to that to know what it’s going to cost for that lifestyle. Then, you can define how much is enough.” – Dean Barber

How Much Do You Think You’ll Need on a Monthly Basis?

That can still be hard because a lot of people don’t understand what they’re spending. Whatever you net, if your savings aren’t going up, that’s what you’re spending. And remember what Logan always say, “Every day is a Saturday in retirement.” You need to pay attention to that and be honest with yourself.

“I always say that the most important thing to do about five years out from retirement—especially if your kids are out of the house and off the payroll—is determining what you’re spending on a monthly basis. That is the biggest driving factor of the plan.” – Logan DeGraeve

And does what you’re spending give you what you want to do after you’re not working anymore? That’s a big question. Dean remembers sitting down with someone and asking them what they thought they needed each month in retirement. He said that he didn’t know how anyone could live on anything less than $40,000 a month. That’s different than most of the people we talk to. In most cases, it’s between $6,000-8,000 a month if you’re debt-free. But it’s all personalized. It’s about how much you want to spend each month.

You Don’t Want to Have Any Regrets

Let’s say that you are spending $7,000 a month in retirement. Well, what if your goals change. What do you need to do so that you can spend closer to $10,000 a month?

“I never want to be the financial planner that works with a client from when they’re 65 to 80 and then gets told that I’ve done a good job for them, but wishes they would’ve known how much money they were going to have at age 80 because there were things they wanted to do. That’s the worst sin that a financial planner can make in my opinion.” – Logan DeGraeve

This is where regrets can really begin to surface. It’s uncomfortable, but think back to final conversations you’ve had with loved ones. Oftentimes, they’ll talk about wishing they would’ve spent more money doing the things they enjoy as opposed to not having enough money to do what they wanted to do.

Your Financial Plan Is a Permission Slip to Do the Things You Want to Do

Those are the regrets that a good CFP® Professional working alongside a CPA can help people avoid. We want people to do things that they want to do and give them the permission slip in the form of a financial plan to do so.

“It’s just the opposite of what Wall Street teaches with wanting you to die on a mattress of money that you could’ve enjoyed. It’s because the longer they can control that money, the more fees they can collect and more money they make. My opinion is that we want you as our client to live a rich life and to do it in such a way where you still have confidence that you’re never going to run out of money and leave a nice legacy.” – Dean Barber

What’s Your Probability of Success?

And we don’t want this to sound reckless. There’s a plan in place. Every time our CFP® Professionals meet with our clients, they’re going to talk with them, update spending (if necessary), and make sure no course corrections need to be made.

“I had a client that was going to Hawaii for their 50th wedding anniversary, but he said they decided not to go. So, I asked them why. It was because his account was down. His plan was still at a 99% probability of success, so I told him to take the trip. That reassurance is what we provide.” – Logan DeGraeve

Dean has several stories like that as well. One important note he has to add is that in those instances, there had been money set aside in a safe bucket that wasn’t subject to market risk. We’ve seen how important that has been over the past year to year and a half.

“If I were to sit down with a client and they want to spend a couple hundred thousand dollars doing X, Y, and Z, but hadn’t set that money aside, then I would need to start looking at their portfolio and the taxability of their accounts to get them their desired spending amount. That’s why we’re constantly asking questions about what our clients are wanting to do. Every time we bring on a client, we spend about two hours with them just in one meeting. We don’t even talk about financial stuff. We’re just talking about life and what they want to do.” – Logan DeGraeve

The Purpose of a Financial Plan

The financial plan isn’t about the financial part of it. It’s about connecting the finances to your life and allowing yourself to do the things that you really want to do. The CFP® Professional’s job is to help you figure out how to make that happen based on your resources. If you’re outside of the reality zone or need to figure out a trade-off scenario, you need to have those tough conversations with a CFP® Professional to make a well-informed decision.

Don’t Let Your Emotions Take Over When Financial Planning

There’s also a big difference between a comprehensive financial plan and a plan of hope. If you hope that your investments are going to make X, Y, and Z, that’s a problem. We don’t know what investments are going to do on a day-to-day basis.

Fear and greed can also be problematic when making financial decisions. Some people have the fear of running out of money. They might be fearful of the unknown, getting sick, or something happening to their spouse. And then some people may be fearful of tax rates going up, inflation, or the length of this bear market. Those are all valid concerns, but in each case, you can plan around them. Making emotional decisions based on that fear and not having a plan to make educated decisions is when problems can quickly arise.

“Once your plan is built, you can stress test it for all those different things. If something were to happen, you can see the likely outcome. You may be fine or you may need to make an adjustment here or there. But knowing that is what gives you the clarity and confidence to do the things that you want to do.” – Dean Barber

Where Are You on Your Journey to Financial Independence?

At the end of the day, there are going to be risks, fears, or scary changes that you may encounter in retirement. But the same thing can be said for when you’re working.

“I think what everyone should take away from this is to reframe your thinking to financial independence. Sit down with a CFP® Professional and let them help you define what your financial independence is. Draw that road map to get you to financial independence. If you’re already there today, you need to know it so that when you get up and go to work tomorrow, it’s because you want to and not for a paycheck.” – Dean Barber

Figure Out Your Retirement Age by Creating a Financial Plan

Hopefully, we’ve helped you understand that your retirement age is truly just a number. Your retirement age doesn’t need to be 65 just because that’s when you can get on Medicare. And your retirement age doesn’t need to be your full retirement age for Social Security. Your retirement age is whenever you’ve achieved financial independence, and you won’t know if you’ve achieved it without a financial plan.

If you’re beginning to seriously think about retirement but don’t know where to start, check out our industry-leading financial planning tool. It gives you the capability to build a plan that’s unique to you so that you can clearly determine your retirement age. You can use our tool from the comfort of your own home and at no cost or obligation by clicking the “Start Planning” button below.


We also weren’t kidding about the retirement fears we mentioned earlier being warranted in many cases. Along with needing to make a plan to circumvent those fears, you need to work with a CFP® Professional and a CPA together. You can get a better feel for what that’s like by scheduling a 20-minute “ask anything” session or complimentary consultation with one of our CFP® Professionals. We can meet with you in person, by phone, or virtually.

Retirement Age: It’s Just a Number | Watch Guide

  • Introduction: 00:00
  • Financial Independence: 00:40
  • Having Goals for Retirement: 05:15
  • Considering Health Care: 09:27
  • What is Enough?: 11:31
  • Avoid Retirement Regrets: 14:10
  • The Financial Planner’s Job: 17:53
  • A Plan of Hope is Not a Plan: 19:24
  • Conclusion: 21:27

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The views expressed represent the opinion of Modern Wealth Management, LLC, an SEC Registered Investment Adviser. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management, LLC does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.