How to Know If It’s Time For You to Retire

At some point in our careers, chances are we will be asking ourselves if it is time to retire.  Maybe you or your spouse have experienced a change in health. Maybe your office staff seem to do better when you are on vacation.  Maybe you are just ready for your next adventure.  Whatever your reasons for asking yourself, how do you know if the time is right for you to retire?

  1. Do a cost analysis—A tough but important part of retirement is your financial scene. A common rule of thumb is that a sustainable withdrawal rate of your funds is 4%.  Beyond just raw numbers, however, factor in the costs that cannot be measured so directly.  Have you reached the point where the dollars you take home do not add up to the effort that you expend?  If so, it may be time for a change.
  1. Do a health analysis—While some people say they want to “drop in the saddle,” others want to have some time to enjoy bucket list items. Maybe you want to travel or spend more time with grandchildren.  Maybe your work take a toll on your health (travel, long hours, too much time sitting, or other health concern), and so you know retirement or semi-retirement will improve your quality of life.  When you do your health analysis, consider also the health benefits of a change of pace.
  1. Do a work analysis—No one needs to tell you that times have changed. In fact, with technology the way it works these days, change happens faster than ever before.  As tough as it is to examine the cost and health risk and benefits of retirement, however, a work analysis might be even harder.  This one involves some self-reflection.  Take a look at these points, and decide where you stand:
    • Are you keeping up with technology, or are you slowing your workplace down because you do not keep up with changes to your business?
    • Do you find yourself wanting to micromanage, or to know everything that your team is up to (even though you may also trust them)?
    • Do you find yourself dragging, not just because of health or energy reasons, but simply because you do not enjoy your line of work anymore?
    • Is there something else you feel you would actually be better suited to doing?
    • Have you longed for a different career, but feared the change or the additional educational requirements?
    • Would your cost and health analysis work out better if you changed careers instead of fully retiring?

Once you have taken a look at these three key areas, it’s time to for one of two things, to either re-dedicate yourself to your current work or to take the leap and pursue your next adventure.

Changing Careers, the Other Retirement

Social security didn’t work out the way many Americans hoped, and with the stock market having tanked so badly less than a decade ago, many working Americans over the age of 50 have found another way to retire: changing careers.

Recently, the American Institute for Economic Research (AIER) reported that 82 percent of workers over age 50 who wanted to change careers were able to make the move.  With that change might come a pay decrease compared to your full-time career, but if that change allows for better hours, better working conditions or more enjoyment, you may find yourself among the “37% of working Americans age 50-64 who plan to work after retiring from their current careers.”

If you decide to stay in your current employment, perhaps your analysis will yield this ROI: you are prepared for the next time you consider the move.

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