Six Signs It's Time to Retire

What are the signs it's time to retire? If you've been thinking about retiring this year but aren’t sure if you should leap, you're not alone.

More than 4.1 million Americans will turn 65 this year, which could translate into over 11,200 Americans exiting the workforce on a daily basis.

Turning 65 is a big deal. You can collect more of your Social Security benefits, plus you don’t have to worry about any penalties if you draw down on your retirement savings accounts.

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Not surprisingly, with so many people turning 65 this year, talk of retiring is sure to be a topic of conversation on the golf course or at the dinner party.

Beyond the Hype: Why retiring in 2025 just makes sense

For many older adults considering retirement, there are several reasons why it's an attractive year to take the plunge. Sure, the stock markets have been volatile in 2025, but investors have been resilient, staying the course, which has positioned them to benefit as markets rebound, which was the case in June.

As of the first quarter, the average 401(k) and 403(b) account balance increased by about 14% and 11.8%, respectively, year-over-year, according to Fidelity Investments.

Bond yields remain attractive, which means annuity rates are better than a few years ago when interest rates were near zero. That may not last if the Fed cuts rates later this year. Plus, with the Big Beautiful Bill having passed Congress, Social Security recipients could get a tax break.

Still on the fence? If any of these six signs ring true, 2025 may be the year you trade the daily grind for a more relaxed lifestyle.

Ready for Freedom? 6 undeniable signs it's time to retire now

1. Your heart says yes (you're emotionally ready)

For many of us, our sense of purpose and value is wrapped up in our jobs. We spend 40 or more hours a week working, so it makes sense that it’s a big part of who we are. But if you give that up, how will you feel? Will you be ok, or will you feel disconnected or even fall into a depression?

“So much of our self-worth and well-being is in our occupation,” says Scott Bishop, managing director at Presidio Wealth Partners. “If you retire today, what does Monday look like?”

If you have no idea what you'll do with all your newfound free time, or trying to figure it out overwhelms you, it may be better to give your post-work life some more thought before retiring.

After all, people who are ready to retire usually have a plan as to what they will do when they stop working full-time. But if you are excited about life outside of work, then a 2025 retirement may be right for you.

2. Your numbers add up (you've saved enough)

One of the reasons people work longer than planned is that they don’t have enough cash saved to cover their lifestyle in retirement. With it potentially lasting thirty years, that’s a lot of money to amass.

But if you did your job and saved enough to live comfortably in retirement, then exiting the workforce is much easier to do. To ensure you have enough, Bishop says to identify all of your sources of retirement income, tally your budget requirements, consider hobbies, travel and unexpected medical expenses, and see if your savings, factoring in inflation, are enough to achieve your retirement goals.

While everyone's situation is different, a recent Northwestern Mutual study found that Americans think about $1.5 million is the magic number to have in the bank to live comfortably in retirement.

Not sure what your magic number is supposed to be? JPMorgan has put together a guide showing how much adults should have saved based on age and income.

The asset management firm's model assumes a 5% annual gross savings rate, a pre-retirement portfolio of 60% equities and 40% bonds, a post-retirement portfolio of 40% stocks and 60% bonds, an inflation rate of 2.4%, a retirement age of 65, and 35 years in retirement.

Keep in mind that these amounts are a general guide. Everyone’s financial situation is different, and some may need more or less in retirement.

“It’s not about a retirement number. It’s what you and your family need to do what you want in the next period,” says Bishop.

3. Your days have a purpose (you have a post-retirement plan)

Whether you plan to work, consult, pursue a hobby, or volunteer, people who are ready to retire have a plan in place as to how they will spend their time.

They understand that there has to be a purpose, a reason to get up and get dressed every day, and without it, their mental health may suffer.

That’s common in retirement. A WebMD survey found nearly one in three retirees in America said they feel depressed, which is a higher rate than the overall adult population.

That’s why it’s important to know what you want to do in retirement beyond saving a lot of money.

“If you retire and don’t have a hobby or schedule, you can go into a depression,” says Erika Wasserman, a certified financial therapist and CEO of Your Financial Therapist. “All of a sudden, what you were doing for 30 years drastically changes.”

Before you leap, make sure you come up with a plan and a daily schedule for how you’ll spend your time, says Wasserman

4. You're cool with the cash flow (your bank account declines)

We spend decades amassing money, watching it grow and compound. But if the idea of watching it dwindle, which it will in retirement as you withdraw some of your savings, keeps you up at night, you may not be ready to stop collecting a paycheck.

After all, you don’t want to retire and embrace a frugal lifestyle because you don’t like seeing your balance go down.

“If you are not ok, ask yourself why,” says Wasserman. “Explore those feelings and determine what would be comfortable at this point in life. Maybe it's not full retirement, it's partial retirement for a couple of years.”

5. Your partner is all in (you've had the crucial spouse talk)

Retirement isn’t a personal decision if you are married; it's a joint decision that should be discussed often in the lead-up to retirement. After all, your retirement will impact your spouse both financially and emotionally.

“Many married couples find the first few years of one or both spouses’ retirement a period of rough transition,” says Bishop. “If you haven’t discussed your plans with your spouse, you should do so; think through what the repercussions will be, positive and negative, on your roles and your relationship.”

6. Your health is a priority (you have a plan for it)

Retirement is supposed to be a period when you can kick back and enjoy your free time, and to do that, you need to have good physical and mental health. While we can avoid unforeseen illnesses and diseases, we can do our best to maintain a healthy lifestyle.

Maintaining a healthy lifestyle will cut down your health care costs in retirement, which means more money to pursue your hobbies.

Before you retire, make sure to prioritize your regular check-ups, including preventive ones. You should have a clear understanding of your healthcare options, including Medicare, supplemental healthcare and how you’ll pay for long-term care (whether you will self-fund it or take out insurance).

If you aren’t exercising regularly and/or don't have a healthy diet, try to incorporate that into your retirement plan.

“Health is wealth,” Nilay Gandhi, a senior wealth advisor at Vanguard, told Kiplinger.com in a recent interview. “Without health, there’s not much anyone can do, regardless of how much wealth they have.

Is 2025 calling your name?

Retirement means different things to different people. Some people have been planning and preparing for years with a clear retirement date in mind. For others, it’s less etched in stone. But either way, if you are thinking about retiring, make sure all the signs are pointing in the right direction.

Want more guidance on retirement savings? Sign up for Kiplinger's six-week series, Invest for Retirement.

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