What's In This Article?
Deciding when to retire is one of the biggest decisions you’ll make in your life. Hopefully, once you retire, you’ll be free to do the things you’ve been looking forward to like traveling and spending time with family and friends.
In order to make the transition from your work-life to retirement, there are several important areas of your life that you’ll need to examine. Let’s take a look at some common areas of concern for soon-to-be-retired individuals.
Things to Consider
Here are some of the most important things you should consider when deciding if now is the right time to retire:
1. Financial Factors
You must consider the financial implications of retiring, as many Americans aren’t able to retire and continue to enjoy a decent standard of living even once they reach the full age of retirement.
So, you should first calculate whether or not you can afford to retire now, based on the nest egg you’ve built up so far and how much Social Security you’ll be entitled to (remember, retiring before the full age of retirement results in you getting paid considerably less Social Security.)
2. Motivation & Plans
The financial consequences are certainly important and are what people tend to focus on, but there are other factors which are just as important. If you enjoy your job and feel that retirement would be quite a dull experience for you, you may decide to continue working long after you’ve reached the full age of retirement.
On the flip side, if you don’t enjoy your work or if it’s impacting your mental health or not leaving you with enough time to spend with your family, you may want to retire a few years early.
Another option to find a good balance between working and having more time to spend with your family is semi-retirement, and this is becoming an increasingly popular route to go down for many Baby Boomers.
3. Your Health
Even if your finances aren’t strong, you may need to retire due to your health – and it’s advisable to always put your wellbeing first, while also thinking about how to stretch your savings as far as possible in retirement.
There are many considerations to make when mulling when to retire – and it’s rarely an easy decision to make.
Most people tend to focus on the finances of retirement and trying to determine if it’s feasible for them to retire now, but you should remember that there are ways to stretch your savings in retirement, potentially allowing you to retire a few years early.
For example, if you can’t afford to retire now and continue to live in the same city or State, you should consider relocating to a cheaper part of the US or potentially even retire abroad if you fancy a drastic change.
A Quick Summary
- Retirement has serious financial implications and deciding when to retire is one of the most difficult and important decisions you will make in your life.
- It’s important to consider the financial implications of retirement, as many Americans approach retirement without a large enough nest egg.
- There are other important non-financial factors to consider, such as your goals and motivations.
- Your physical and mental health also need to be considered and prioritized above everything else.
- If you want to retire but seemingly don’t have sufficient savings to do so, you should consider ways to cut your expenditure so you can stretch your savings and get by.