When do you want to retire? Deciding when is the best time to retire can be one of the biggest decisions in your life.
Everyone has different reasons for retirement. There are always financial decisions behind this question but often the time of retirement is based on your emotions.
When people approach retirement age there is often a combination of excitement and anxiety. The anxiety often comes from figuring out how much you can afford to spend. But the excitement comes from having more free time and being your own boss.
However, what will I do with all that free time? All these emotions are related but money is the most reasonable concern.
Most of us who are close to retirement are worried about having enough money to maintain our lifestyle in the next 20 years. And yet, money is not a remedy for a successful retirement. Having enough of it to feel financially secure is important but there is more to it than just money. Besides having a solid financial plan, you need to have a plan for how to stay active and engaged.
Below are my answers to the question of “How do I decide when best to retire?”
Figure out what is important to you.
Besides getting closer to retirement age, everybody has their own reasons to retire.
You need to figure out what is most important to you. Is your financial security most important or your personal time with family? How is your health? Are you healthy enough to keep working?
I write a lot about financial security in retirement and how to achieve it, but I am confident that with age your time has become the most important commodity. And how you spend your time becomes more important as you grow older.
Let’s be honest and face the fact that when you have fewer active years left, you need to make the best use of them.
There is no need to rush to retirement if you are happy and finding meaning in your work. However, if you lost interest in your work and looking for other ways to spend your time that you think is more important, then you are ready to retire.
The Covid-19 has changed our lives. Everybody is talking about “The Great Resignation” in the workforce. Mass numbers of people quit their jobs and labor markets are shaking. According to statistics, the largest disruption is among those in their 30s and 40s.
But there is a big number of baby boomers who are retiring for reasons related to the pandemic.
When you are faced with working from home and learning new technologies on your own, and often forced to do more work with fewer colleagues, many people in their 50s and 60s decided to call it quits.
Especially it is related to nurses and teachers who do not want to continue working on the front line of the disease. Many had a wake-up call when they caught a virus and got motivated to retire and take care of their health.
Spend time with the most important people in your life.
Have you thought about who are the most important people in your life and if you spend enough time with them?
We all know that maintaining a good balance between work and personal life is important, however many of us get more focused on career and promotions.
Even outside of work we spend more time on Facebook, Instagram, Twitter to stay informed and connected with former classmates or colleagues because they post often rather than spend time with people who are important to us.
I noticed that many of my friends and colleagues start moving closer to family or friends after they retire so they can spend more time with them.
I have read that one of the greatest regrets of people who are getting closer to the end of their lives is that they didn’t spend enough time with their loved ones.
When we retire I want to move closer to my daughter so we can spend more time together. And when we have grandchildren, we will want to spend more time with them.
Are you healthy enough to keep working?
When it comes to deciding when is best to retire, we have to make the decision based on our personal circumstances. And health can be a big motivator to retire sooner and live the life you want to live. I had witnessed many people who worked too long and were forced to retire due to illness.
It is natural that your health is declining with age. But there is no reason to keep working if you suffer from work-related health issues like constant stress, anxiety, and headaches.
Improving your health is an important reason to retire before it is too late.
Both of my parents died young and had no chance to enjoy their retirement. Looking at their life I do not want to miss out on my happy times. I want to enjoy my retired life while I am still healthy.
Another strong incentive to retire is becoming eligible for Medicare at age 65. If you are working for an employer who does not provide health insurance, you might be ready to retire when you turn 65. Medicare Part A is free for everyone. And premiums for Medicare Part B, C and D are more affordable than paying for health insurance on your own.
Figure out what is your purpose in life in retirement.
The world has changed and people entering retirement today want fulfillment and purpose. Today’s retirees are more active and adventurous. They are more likely to be starting a new business, pursuing their passions, and exploring the world.
If you feel ready to leave the working world, think about how you will spend the 40 + hours a week you spent previously at your job. The reality is that you may feel ready to retire, but on the other hand, you may feel nervous and doubtful.
What are you going to do with all that free time?
One of the best things you can do is create a plan for your retirement. You need to decide what will be important in your new life and how are you going to spend your days and weeks. The minute you say goodbye to coworkers you need to know what is next for you.
When you have a retirement lifestyle plan ready it will make your transition from job to retirement is much easier.
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I believe that desire to travel the world is a big factor for people wanted to retire. Another big factor is a desire to complete a bucket list.
Do you have a bucket list? What is on your list?
If you do not have it maybe you want to create one so you will know what you want to do in retirement. Creating a bucket list is a helpful tool to set up your retirement goals or have a list of things you want to complete at least once in your life.
Write down a list of things you always wanted to do but never could because you did not have time, energy, money, or something else.
A few ideas from my retirement bucket list:
- Live in France for a year
- Learn the French language
- Road trip through Italy
- Take cooking classes in Spain and learn how to cook paella
- Write an e-book
- Visit Brazil during the carnival and learn how to dance salsa
- Grow a vegetable garden
- Design and build a lake house
- Go on a Safari in Africa
The important thing to remember is that we spend our lives doing things that we have to do – school, career, kids, family. And spending enough time on the things you were dreaming about for a long time is more important than work. After all, life is short!
If you do not know what to do with your time in retirement here is a helpful article you might want to read:
Do you have financial security?
As you are getting closer to retirement age you will have several big financial decisions to make:
- When to stop working
- When to take Social Security
- How to pay for health care
- How to generate cash from your retirement savings
These decisions are interconnected and could make a big difference in your retirement lifestyle.
As I said before, if you are happy and fulfilled at your workplace, there is no reason to rush to retirement because you can be more financially secure if you delay retirement for a few extra years.
People live longer and we need to have enough money to support our lifestyle in retirement.
One of the biggest factors with regards to expenses that will affect your financial security is where you live in retirement. If you are planning to relocate after retirement you need to remember that buying and selling a home often comes with additional expenses.
Where you will live and how you want to live in retirement will be one of the most important decisions you have to make. This decision will affect how much money you will spend on housing and how much you will have left to enjoy life.
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But if you want an extra financial cushion, working longer for a few extra years gives you a chance to contribute to your savings, increase your Social Security income and delay withdrawals from your retirement funds.
What are your reasons to retire?
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When is the best time to retire – there is absolutely no “one fits all answer” – everyone’s situation is different. There is no one “best” age to retire. There isn’t even a “right” age to retire. Stuff happens. You can plan all you want but you may find retirement thrust upon you before you thought you would retire.
My advice? Don’t even think about what the “best” time to retire is or how you might maximize your Social Security income.
If you like working, then work. If you want to get off the work treadmill and you think there is a good chance you can keep your lifestyle then retire. But only YOU know if that’s the case.
Wonderful addition to this post. Thank you for sharing your thoughts on the topic!