Journey Into Retirement

The question isn’t at what age I want to retire. It’s at what income.

George Foreman, Pro-Boxer and Entrepreneur

Of the topics being discussed on internet retirement websites and blogs the two most prevalent are concerned with retirement finances and retirement timing. Questions about when to retire are frequent, but difficult to answer. The prevailing logic says that “when you FEEL it is time, it is time.” However, this is unsatisfactory advice because it misses some important considerations. If feelings were all that mattered, a large number of people would probably retire in their 30’s or 40’s. This might work for some “internet millionaires,” but is probably impractical for most of the rest of us.

So, I have done the research and worked through this issue in my own case. It seems that the answer to the “when to retire” question is not straightforward. Three factors must come together for retirement to be an option. If you are ready in these three areas, then you are probably ready to pull the trigger on retirement. Here are the questions that you need to ask:

Are You Psychologically Ready for Retirement

Are you psychologically ready for the change to a new lifestyle and set of activities? Note that this is a quite different question from “do I want to change jobs or the company that I work for” which is common among people in the workforce. Are you ready for a life-change that moves beyond questions pertinent to your professional career? For some, retirement can be freedom. For others, it can create a negative situation. If your personal identity is wrapped up in what you do professionally or if you derive a lot of your social relationships from the workplace then retirement may not be for you. Separating yourself from work could cut you off from all of those sources of challenge, accomplishment, and human interaction. On the other hand, if you are ready to move beyond the working world you may be ready for retirement.

If you are unhappy in where you work, but not in what you do then perhaps a job change is in order. Retirement would not correct your current unhappiness. However, if you are looking for a change that will offer more freedom and potentially fewer hassles than your current work-life, perhaps retirement is the right option. This is the first component of the answer to the “when” question.

Are Your Finances Sufficient to Maintain Your Retirement Standard-of-Living

Will you be able to sustain your current standard-of-living if you retire? To answer this question you must assess your sources of retirement income, you expenses, your savings, and any job related income you may plan to collect following your current employment. If the financial picture looks positive, then retirement may be a viable alternative at this point. There are a number of on-line resources and books available to help you determine your retirement financial viability. Search “Retirement Finances” on Amazon.com and you will get an extensive list of books available on the topic. My book (also available on Amazon and in the book tab above) will help you make this assessment as well. Use these resources to help you answer this question. This is factor number two.

Have You Made the Necessary Practical Decisions

Where will you live in retirement? Will you relocate or stay put? If you plan to move, have you worked through the practical aspects of the move? What will you do on a day-to-day basis to keep you busy and engaged once you leave the workforce? Will you find part-time work? Will you pursue volunteer activities? Will you explore new areas of interest? These are all questions that need to be resolved BEFORE you make the retirement decision because they help you define what your new life will be like. There is a lot written on the importance of getting these things settled before you make the leap. This will help you avoid some retirement landmines down the road. To understand this better I would refer you to an excellent book by Ernie Zelinski entitled “How to Retire Happy, Wild, and Free.” Also, you can get a perspective on why preplanning is important in my previous blog post entitled “A Fulfilling Life in Retirement.”

So, What Is the Answer

If there is a confluence among these three areas, then retirement is probably a viable option now. However, typically these three areas do not come together at the same time. Many people are psychologically ready to leave the workforce before their finances make it possible. Or, you may have the money you need, but still derive considerable pleasure from your work. Retirement might not be a positive change.

If, at this point you conclude that these three areas have NOT come together for you, then you need to determine when this will happen. Once you do that, the “when can I retire” question will be answered.