To retire or not to retire? That is the question. As you approach 60, this is something you may ask yourself, as many people do. You've been working for much of your life and retiring early may sound especially appealing. You can live the lifestyle you want, avoid stress, and see your grandchildren more often. But if you retire early will you have enough capital to fund your golden years?

As the normal retirement age gets closer, many people start wondering if they will have enough money to last through the course of their retirement. But can we accurately calculate such projections? How do you know much money is enough? What will your healthcare needs be, as this is often the biggest expense in retirement. While we may not be able to predict all the variables in our lives – like the future rate of inflation, a car breaking down and needing replacement, our own longevity – there are tools out there that can help us make some general retirement calculations. (For more, see: A Cautionary Tale About Retirement Calculators.)

Getting the Timing Right

Tina C. Powell, a financial advisor with Beacon Wealth Management in Hackensack, N.J., offered the following advice when it comes to the dilemma of timing your retirement. “This is a quality of life decision – one that involves visualizing what retirement looks like for you and defining your goals, family obligations, and lifestyle while also evaluating risk factors such as market fluctuations and even health," she said. "Small changes today will affect the timing of your retirement decision and the best way to see this in action is with you at the controls.”

When thinking about early vs. later retirement, one of the main factors is income. To help you project the monthly (or annual) income you would have if you retired early at age 59.5 (when you can start collecting your 401(k), 403(b), or IRA benefits), at 62 (the earliest you are eligible to start collecting reduced Social Security benefits), at the full retirement age (which ranges from 66 to 67 years old depending on when you were born), or if you kept on working until 70 and beyond, there are several calculators that can give you an approximate level of income to expect.

Powell recommends two useful retirement calculators: Vanguard’s Retirement Income Calculator and the Social Security Administration’s Quick Calculator. Larry Frank, a financial advisor with Better Financial Education in Roseville, Calif., suggested using a calculator from Moneychimp.

For example, if you are in your 60s, chances are you have already saved a significant sum in one of the several retirement savings accounts available to you (401(k), 403(b), IRA, etc.). Even if you started late, assuming you took advantage of catch-up contributions, it's likely that you already have a nice nest egg saved. Since you're still employed, you can contribute up to $18,000 annually to your retirement accounts in 2017. And if you are over 50 years old, the government lets you invest even more to help you catch up — an extra $6,000 annually.

Now it's also important to think about your Social Security benefits. How much will you be receiving? Keep in mind that if you retire early at 62, your Social Security benefits will be reduced. The longer you delay, the greater monthly benefits you will receive. This is especially true if you wait until your full retirement age; if you delay receiving your benefits, your annual percentage will grow 8% until you reach age 70. (For related reading, see: Youth and Roth IRA Equals a Solid Retirement Plan.)

Plugging in Your Variables

Consider all these variables as you plug your numbers into the above mentioned calculators. On top of your monthly distributions from your retirement account(s), add in your Social Security benefits; this will give you an estimate of how much you can expect your monthly income to be. Then you can manipulate those numbers to see how much you will receive if you retire at age 59.5, age 62, or if you wait until you reach the full retirement age of 66.8 or older. Once you figure out your monthly distributions at retirement, keep in mind that they will be taxed, as most are considered income. 

Developing the right retirement plan is one of the most important actions you can take, as it will affect the quality of your life in retirement significantly. Many variables can affect your retirement income, including the timing of your retirement, whether your spouse will have retirement income, and if you will have any additional income from other sources, like real estate or other investments. Then there are other factors to consider such as inflation, which is currently below the historical average, as well as the volatility of the market.

It's important to educate yourself about all your options now; if possible, it's advisable to work with a fee-only financial advisor to help make retirement planning and calculating your future income work better for you. (For related reading, see: 4 Best Apps to Track Your Retirement Money.)

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