Occasionally, I’m asked by readers and personal contacts, “When do I know that I am ready to retire?”. My immediate reaction is: don’t worry, you will know. While this is true for some, for others, they are not sure when the right time is, and just sort of play it by ear. Sometimes, the decision is made for us, by a company that no longer wants our services. If this happens to you, perhaps you are a victim of ageism in the workplace. Or, there may be a triggering event, like the deterioration of your health or that of a spouse or close family member. However, like most things in life, it is better if retirement is an intentional event, not one foisted upon us by circumstances.
Following are 9 signs you are ready to retire. Key signs that it is time for you to hang up the full-time position and enter into the magical and mystifying world of retirement.
Sign 1: Your Finances are in Good Shape
There are three major groups of pre-retirees: those who are financially set; those who are marginal; and those that have virtually no savings. According to the Center for Retirement Research at Boston College, “50 percent of households are “at risk” of not having enough to maintain their living standards in retirement. Explicitly including health care in the Index further drives up the share of households at risk.” Not surprisingly, the study points out that “saving more and working longer may substantially improve the outlook.”
Incidentally, there is a lot of debate about just how much money you need to retire. Some financial advisers claim that you need $1 million or more, while others claim you can do this with only $500 thousand of assets. This article from SmatAsset makes the argument for the lower figure.
Sign 2: Your Spouse/Partner is on Board
One way to sabotage retirement is to spring it upon your spouse/partner without a thorough discussion about the rules of engagement post-retirement. After all, you are asking your partner to accept major lifestyle changes, some of which can be unpleasant. For example, if you have been going to work every day and now are puttering around the house, this is a disruption that both of you will have to adapt to. Make sure you have a workable plan for both of you in areas like finances, joint and singular activities, household chores, travel, and so forth.
Sign 3: You Have Had it with Your Current Job
If your current position brings you more heartburn than pleasure, and more frustration than fulfillment, perhaps it is time to hang up your spurs and ride on to your retirement adventure. This doesn’t necessarily mean stopping cold-turkey. You can work part-time for another firm, or try a totally new career path, but unless finances force you to do so, there is no reason to spend five days a week doing something that tortures your body or spirt.
I have a long-time work friend who is in his early 60’s and is still plugging away at a job he hates. He detests his boss and his commute and is constantly being undermined by much younger co-workers. I know he has plenty of assets (including six rental properties) that make work unnecessary but my friend continues to work at his miserable job and continues to complain to anyone who will listen. By most criteria, he is ready to retire, but for some reason will not do so.
Sign 4: You Have a Personal Mission
Perhaps you have been longing to do something that your current career will not allow. This could be a new business idea, creative pursuit, extensive travel, or charitable endeavor of some type. While of course you need financial security, your motivation is to do something that will feed your soul, not just your bank account. This is the type of longing that created the expression: Don’t die with the music still inside of you.
Sign 5: You Face a Retirement Trigger
A retirement trigger is something that forces a change, even if you enjoy your work. One example is your personal health. You may find yourself in a position where you are physically or mentally unable to perform you job. Or, your spouse/partner may need care that you can’t or won’t delegate to a third-party. I hope that if this occurs, you are able to move on with a joyful spirt and not feel as if you are being forced to retire against your will.
Sign 6: You’ve Got Your Healthcare and Insurance Covered
Legions of people that would otherwise retire, continue to work for access to low cost healthcare and insurance. If you are in the middle group finances wise (sign 1), you may delay your retirement age until one or both spouses are eligible for Medicare.
Sign 7: You Have a Plan for Life Balance
Too many retirees ask the tough but critical questions after they retire, including:
- How am I going to spend my time?
- What people will I spend time with?
- How am I going to give back?
- What’s my reason for getting out of bed every morning?
- How will my relationship with my partner change?
- How will I maintain good mental and physical health?
The best time to ask these questions is well before you make the retirement plunge. The second-best time is right now.
Sign 8: You Have Your Living Situation Figured Out
The great news about retirement is that – when it comes to your living circumstances – you may no longer be constrained by jobs, family, or anything else. The bad news is that there are so many choices that it sometimes causes paralysis. Should you move to a better climate or stay close to the grandkids? Should you live at the beach or mountains? Should you downsize or maintain your current home size? Should you move to an active-adult community? To be sure, there are lots of questions and lots of options but it’s best to figure this out as part of your overall retirement plan.
Sign 9: You Have a Network for Support and Recreation
After retirement, your professional network will likely dissipate. Unless you are one of those people who prefer not to be around others, you will want to ensure that you have an identified tribe of individuals to enjoy life with, as well as provide support where needed.
When and how you are ready to retire is one of the more important decisions you will ever make – right up there with your choice of career and life partner. If the above list of the 9 signs you are ready to retire gives you the green light, by all means join the retirement party. Just make sure it is a party where you choose the time, place and circumstances.
Thank you reading our article on the 9 Signs You Are Ready to Retire. We hope that this has been helpful in your decision about when to retire and has at least provoked some thought about one or more of the signs that you may have overlooked.
For another perspective on retirement timing, read Roxanne Jones’ article, Now or never? Deciding when to retire.