Properly preparing for retirement takes years, if not decades, as you make sure you pay the required credits into the Social Security system as well as put aside enough supplemental retirement savings to support your retirement budget needs. Many investors would like to retire sooner rather than later, and if you have the financial resources, you can retire at any age.
Social Security Administration
To some, getting your retirement refers to getting Social Security benefits. In fact, 96 percent of U.S. workers are covered under Social Security. You must have at least 40 credits with 10 years of work to qualify for benefits. The earliest age to get Social Security retirement benefits is 62, but you have to wait until you're 67 to get a full retirement benefit.
Pension benefits are established by your employer. Your benefits may be reduced depending on how many years you worked for that company. Most pensions are paid beginning at 55, although the benefit is reduced. You get the full benefit at 65. Those who work in the public sector may have Social Security benefits reduced by pension benefit amounts.
Qualified Retirement Plans
Qualified retirement plans such as IRAs and 401(k) plans are supplemental retirement income sources with tax benefits. But the IRS expects you to hold money in these accounts until age 59 1/2. Early distributions are penalized 10 percent plus added to income. There is a way to access these plans without penalty and retire early with a consistent income. Using IRS Code 72(t), you can take a consistent income stream at any age as long as you take it in regular amounts and regular time frames over at least a five-year period.
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Employees of nonprofit organizations who have an employer-sponsored 403b may be able to retire at age 55 without penalty. Like 401(k) plans, 403b plans accumulate funds on a tax-assisted basis through salary reductions and employer contributions. As long as employees leave the organization after age 50 and maintain the 403b with the plan administrator, the IRS allows distributions to start at age 55.