When is the right time to retire?

18 Jun 2013

Once we reach our 60’s, most of us will begin to consider retirement. Some may feel the need to exit the busy and often stressful business world, while others are full of creative ideas about what to do with newly available free time.

Perhaps you’re also ready to relax, take it down a notch and savour peace and quiet each day. These visions of retirement can be compelling reasons to finally exit the workforce. But before you can begin our second act, you have an important decision to make. You need to commit to a time and date to pull the trigger and commence retirement. This important decision will impact the rest of your life. Here’s how you can decide when it’s the right time to retire:

Examine your financial resources. The first and most obvious duck to have in a row when picking a retirement date is sufficient financial resources. You want to have enough money to meet your obligations, live the retired life you want and have fun.
Without this prerequisite, retiring from the working world is not the soundest of decisions to consider. However, once you feel you will be able to live on the income generated by your savings and investments, it is not necessarily the right time for you to retire
There are other considerations that might improve your odds of realizing a truly fulfilling retirement.

Develop a plan. For the next 20 or more years, you will be living this new chapter of your life. You need to develop a plan detailing how you will spend your time. Decide whether you want to relax and take it slow or fill your days with new and exciting activities.

Coordinate with your spouse. Whether your significant other is already retired or still working, things will change when you retire. If your spouse is already retired, your presence will be felt 24/7 and you will need to integrate yourself into your spouse’s world. It would be inconsiderate to expect your spouse to drop everything to accommodate you. Both of you can enjoy this transition by communicating openly with each other. Be patient and give each other the freedom to pursue individual interest. Being sensitive to each other’s point of view will add enjoyable years. It will be well worth it in the long run.

Schedule enough to do. Twenty years of retired life is a long time to just relax. Can you enjoy your day if there is nothing on the schedule, just relaxing in the moment? Decide whether your current collection of interests and hobbies will be enough to keep you busy. For most people, retirement will be a combination of engagement and relaxation. The appropriate proportion depends on your personal tastes. If you are someone who is happiest when engaged in activities and projects, define what those may be in the planning process prior to retirement.