Knowing when to retire is a big decision—and let’s face it, a little intimidating.
For some, retirement is the beginning of a lifelong dream of sipping margaritas on a beach. For others, it’s a frightening plunge into a void of daytime TV and far too much time to alphabetize the spice rack (a noble cause, by the way).
Either way, deciding when to retire involves more than just hitting a certain age. Let’s break it down with a large dose of practicality and a pinch of philosophy.
Can I Afford to Retire?
First things first: how much do I have, and how much do I need? The cornerstone of retirement planning is ensuring you have enough money to keep the lights on and enjoy life.
Here are some things to think about (we do):
- Know Your Expenses: What does your life cost? Housing, healthcare, travel, your guilty latte habit—add it all up.
- Check Beyond Your Savings: Think beyond your defined retirement account(s) to other investment or bank accounts, pensions, Social Security, rental properties, or other assets of value.
- Think Long-Term: People are living longer. Can your money stretch for 20, 30, or even 40 years? Don’t forget inflation—things will get pricier.
- Get Help: This sounds self-serving (and it is, but that’s not the intention), but engaging a financial advisor who can be your GPS through the maze of retirement planning will likely be well worth it.
If the numbers don’t quite add up, maybe stay with your job a bit longer—or consider a side gig (think: consulting or just reduced time at your current job).
Will I Be Happy in Retirement?
This really should be the first question on the list… but we are financial folks, so “Can I afford it?” made it to the top.
The next question to ask is—Now what? Retirement isn’t just about quitting your job—it’s about starting something new. So, you might want to ask yourself:
- What’s the Plan? Volunteering, travel, learning to salsa dance—what’s going to keep you out of trouble?
- Will I Miss Work? Jobs bring routine, social life, and, dare we say, purpose. As humans, having a sense of purpose is essential to our happiness and well-being. Think about how you’ll replace those.
- I will say, in my 20+ years at this, I think this may be the single most impactful concept we deal with – finding purpose with work, family, community… or retirement.
- Am I Ready for Change? Retiring isn’t all sunsets and golf courses. It’s a shift—a major life shift—and it takes some adjusting. Are you ready for it? And, if not, how can you prepare for it?
And remember: Retirement isn’t a weekend. It’s often a very long time—decades, in fact! You’ll want to make sure it’s filled with meaning and joy.
One tip or suggestion: Try taking substantial time off and treat it like a “dry run” of your retirement routine.
If I Love My Job, Why Retire?
If you are one of those lucky folks who actually enjoys what they do (me, for example), why stop?
In my spare or down time, I find myself thinking about investment strategies and reading investment research. If spending non-work time thinking and reading about work-related material sounds like you, you might want to consider:
- Just Dial It Back: Can you go part-time, become a mentor, or ditch the soul-sucking parts of your job (like writing The Weekly Whiteboard! Kidding, I really enjoy writing these!!)
- Work-Life Balance: If work makes you happy but eats into your non-work life, tweak it. Maybe you don’t need to retire—just recalibrate.
- Explore Alternatives: Sabbaticals, big/consuming projects, or new ventures can offer the best of both worlds.
If you’re loving the 9-to-5 grind (or your version of it), keep at it. No law says you have to retire.
What Does Retirement Really Mean or Look Like?
Okay, here is where I get a little philosophical. Does retirement (in the old-school sense) still exist? This is akin to—what’s the sound of one hand clapping, or, if a tree falls in the woods does it make noise? But seriously, retirement today isn’t your grandparents’ shuffleboard tournament. It’s whatever you want it to be. Not only do we, on average, live longer, but we are tending to be more active in our retirement years. So, don’t shy away from thinking about work and the end of work in a more philosophical or conceptual way.
The ideas related to re-thinking what retirement means might create a change far sooner than you expect:
- Side Hustles: Consulting, freelancing, or teaching—earn some cash and have some impact on your terms.
- Passion Projects: Write that novel, start a garden, or dive into woodworking.
- Active Living: Travel the world, bike across your city, or become the pickleball champ of your neighborhood.
- Relocation: Move to that dream spot—whether it’s a sunny beach or a cabin in the woods.
Not to get all mystic or metaphysical, but picture your ideal day: Are you relaxing, adventuring, serving others, exploring ideas or interests… or a mix of these? The clearer your vision, the better your potential outcome.
The Bottom Line
Deciding when to retire is part math, part soul-searching, and (possibly) part trial and error. There is no universal answer—just the one that works for you. Take the time to crunch the numbers, dream a little, and figure out what lights you up.
Whether you’re ready to dive headfirst into retirement or keep punching the clock a bit longer, make it your choice. After all, retirement isn’t the end—it’s the start of your next great adventure.
