Retirement

Retirement is when a worker leaves the active workforce. Often workers will need to save money to fund their retirement properly.

In the US, retirement typically occurs around age 65. Early retirement is considered to start at 62––the minimum age for workers to be eligible for government-funded programs like Social Security.

The goal of retirement is to allow workers to rest after years of working. To achieve this, workers need to save money so they can be financially secure during retirement. Though the US government provides retirement assistance through Social Security, it rarely replaces 100% of someone's income. If a retiree doesn’t achieve 100% income replacement, they may need to change their lifestyle in retirement.

To increase the possibility of meeting a 100% income-replacement goal, workers will often participate in retirement plans that are usually sponsored through their employers, such as a 401(k). They may also save independently through retirement accounts such as a Roth IRA. The longer they participate and contribute to these accounts, the more time their savings have a chance to grow. By combining savings from these options with Social Security, workers can better fund their retirement years.