Advertisement
retirement

How to Know It's Time to Retire

The decision to retire is a personal one that's as much psychological as financial.

My college roommate, Molly, recently invited me to a mini reunion to mark the 50th anniversary of our high school graduation. Inevitably, the conversation turned to retirement: who was thinking about it, who had done it, how it was working out.

One classmate, Marie, had retired as a school psychologist. Another, Karen, had repurposed her skills to start a new part-time career after being laid off from her corporate job in human resources. She’s now a consultant for downsized executives and has no plans to formally retire. Molly, a scientist, is struggling with how to bow out of her administrative responsibilities while continuing her research on the causes of skin and oral cancers. All of the women were curious about what had made me decide to retire.

Advertisement - Article continues below

As their experiences show, the decision to retire is a personal one that’s as much psychological as financial. “Retirement is really a lifestyle change triggered by some event,” says Brian Sykes, a certified financial planner in Blue Bell, Pa. “In a way, clients come to me asking me for permission to retire.”

Retirement Triggers

Aside from involuntary catalysts, such as layoffs and health issues, those triggers often fall into several categories. One is family. Many people simply want to be closer to relatives or spend more time with grandchildren. Another is career restlessness—the desire to do something different, make more of an impact or just have more flexibility. Still another is a reminder of mortality, such as experiencing a health scare or receiving news of the death of a close friend or family member. “People realize that time is their one fixed resource, and how they spend it becomes more important as time shrinks,” says Sykes.

Advertisement - Article continues below
Advertisement
Advertisement - Article continues below

Whatever their reasons for retiring, “people make decisions emotionally and then use the numbers to justify those decisions,” Sykes says. “My job is to fill any financial gaps.”

It’s not uncommon for people to hold on to a job too long, sometimes for financial reasons or fear of the unknown. “Unless you have a really exciting plan to transition to, there are a lot of psychological reasons not to retire,” says financial psychologist Brad Klontz. “If it turns out well, it’s usually because people have pretty good social connections or haven’t totally retired.”

Klontz points out that baby boomers are the first generation to face the challenge of how to plan for a retirement lasting 25 to 30 years. To ease the passage, he suggests picturing a post-employment “psychological timeline.” What will you be doing, say, three years after you leave your job? Where will you be living? Who will you be spending time with? “You have to be very specific and realistic about your post-retirement lifestyle,” he says.

Advertisement - Article continues below

As for my own decision, I can check a number of the boxes here. I wanted more flexibility to travel and get to know my young grandchildren. I felt it was the right time to make a smooth transition to my successor, and the idea of writing a column each month was appealing. I even made a retirement to-do list—write, volunteer, babysit, exercise more, travel, remodel the bathrooms, clean out the closets—and a schedule of what I’d do each day.

Seven months in, my week looks nothing like I pictured it, and much of my to-do list is waiting to be done. Babysitting and traveling have worked out fine, and I’ve stepped up my exercise. But I haven’t had time to tackle the bathrooms or empty a closet or fit in volunteer activities, which I’m still researching. Because I continue to write, it often feels as if I’m not retired but working part-time with a lot more flexibility. Retirement for me is a work in progress, but I’m happy to take on the challenge.

How about you? If you are retired, how did you make the decision, and have things worked out as you planned? I’ll be happy to share your experiences and advice.

Advertisement
Advertisement

Most Popular

8 Things You Must Know About Retiring to the Carolinas
retirement

8 Things You Must Know About Retiring to the Carolinas

From the mountains to the beaches, North Carolina and South Carolina offer retirees plenty of incentives.
August 14, 2020
What Trump's Payroll Tax Cut Will Mean for You
Tax Breaks

What Trump's Payroll Tax Cut Will Mean for You

President Trump issued an executive order to suspend the collection of Social Security payroll taxes. How much could it save you?
August 13, 2020
7 Surprisingly Valuable Assets for a Happy Retirement
happy retirement

7 Surprisingly Valuable Assets for a Happy Retirement

If you want a long and fulfilling retirement, you need more than money. Here are the most valuable retirement assets to have (besides money), and how …
August 3, 2020

Recommended

8 Things You Must Know About Retiring to the Carolinas
retirement

8 Things You Must Know About Retiring to the Carolinas

From the mountains to the beaches, North Carolina and South Carolina offer retirees plenty of incentives.
August 14, 2020
An Advocate for End-of-Life Care
Caregiving

An Advocate for End-of-Life Care

Without a health care proxy, your written instructions for future medical care may not be carried out if you become incapacitated.
August 14, 2020
Get the Most from a Zoom Meeting with Your Financial Adviser
retirement planning

Get the Most from a Zoom Meeting with Your Financial Adviser

Done right, virtual financial planning meetings can be just as productive (or even more so!) than in-person ones.
August 11, 2020
Drawing Down Retirement Savings in a Pandemic
Coronavirus and Your Money

Drawing Down Retirement Savings in a Pandemic

Tapping the right accounts at the right time matters. Knowing how much a retiree can spend each year without running out of savings in old age is even…
August 7, 2020