When Can I Retire?

When can I retire? It’s a question you probably ask weekly or monthly, if not daily. The problem is that there is no one “right” answer. There are a variety of factors that should go into setting the date that is right for you.

However, in general, assuming you want to retire securely, you can retire when you have a plan for:

Retirement Income and Expenses: How will you cover your expenses (no matter how much they might change over the rest of your lifetime) with income (that may also vary over your lifetime) from benefits, savings withdrawals, retirement work, dividends, pensions, etc…?

Assumptions and Unknowns: What unknowable factors – Inflation, investment returns, unexpected expenses, and your longevity for example – must you somehow calculate for your financial security?

Your Values: What trade offs can you make to prioritize your values and the life you want to live?

Sounds complicated? It is, but not impossible. And, creating this kind of plan will give you confidence to set a retirement date.

Below are 17 additional questions you should ask yourself when figuring out when to retire. (These topics are all covered in the NewRetirement Planner, a do it yourself financial planning platform.)

1. Do you like work?

If you like and enjoy your job, consider the downsides of retirement. The right work can keep you mentally, physically and emotionally vital.

2. When will you start Social Security?

When you start Social Security is a totally different question than when you stop working. But, you might be able to stop earlier if you wait to start your benefits.

Your total lifetime Social Security payments will likely be greater if you delay the start of benefits until age 70 — whether you are working or not.

Use the Social Security Explorer, part of the NewRetirement Planner, to figure out the best way to maximize your benefits.

3. What are your income needs?

How you spend your time is an undervalued aspect of retirement planning. Think about it. You Many people think that they can retire when they have saved enough money. However, most personal finance experts believe you should be asking a different question.

The real retirement question is: How much income do you need in retirement? And, in order to know how much income you need, you must first project your expenses. How much do you need to spend? How much do you want to spend? And, how will that change over time?

Use the NewRetirement Planner to create a detailed future budget.

4. How will you fund your income needs?

Retirement income planning is another critical part of a secure retirement.

The NewRetirement Planner makes it easy to plot Social Security, withdrawals from savings, passive income streams, pensions and all of your income sources and see how those measure up against your expenses.

Learn more from 3 steps to a retirement income plan and 18 retirement income strategies.

5. How long will you live?

Americans are living longer than ever before. A longer life means that you need to be able to pay for more years in retirement.

According to the latest data, the average life expectancy is 84.5 years. However, women (in general) live longer and 84.5 is only an average — you are likely to live longer, much longer even.

However, averages don’t really matter. You need to assess how long you (and your spouse) are likely to live. Try a good longevity calculator to get a more personalized number.

And then, use your personalized projected longevity as part of your retirement planning. The NewRetirement Planner allows you to set your own longevity. You can try different scenarios to see if you will run out of money (or not) at different ages.

6. What is your projected out-of-money age?

This is a big deal. You obviously want your projected out of money age to be after your expected longevity. The NewRetirement Planner makes it easy to identify this number and find ways to improve your situation.

7. Does your investment strategy need to change for retirement?

You have probably spent much of your working life saving and investing. As you approach retirement, you need to shift from a focus on accumulation (saving, saving, saving) to spending (efficient use and drawdown of your assets).

Retirement is a good time to reassess your investment strategies. Here are 28 retirement investing tips.

8.. Have you planned for taxes?

With a little bit of planning, you can save big on retirement taxes. From doing Roth conversions to strategizing your Required Minimum Distributions (RMDs), you can significantly reduce this expenditure.

9. Are you too dazzled by the allure of retirement?

If you spend your days dreaming about what it will be like to kick up your heels during the golden years, you might be more likely to retire sooner than some of your peers, at least by a couple of years, according to a CRRBC study.

You should evaluate and update your whole plan and do a retirement check every time there is a The allure of retirement can influence some to leave the workforce early, even if there’s a cost to financial security.

Don’t rush into retirement if you cannot afford it.

10. Have you considered transitioning to retirement?

Instead of quitting cold turkey, the ideal might be to transition to retirement — go part time and gradually phase out of work.

11. How is your health?

Health is one of the top factors that affects retirement decisions.

Thirty-five percent of people between the ages of 55 and 59 claim poor health for their reason to retire. This is according to a study by the National Institute on Aging.

12. Have you planned for how to fund healthcare?

Healthcare is often the most expensive and unpredictable cost to plan for in retirement. In the event of any unexpected health issues, health insurance could protect you from incurring potentially high out-of-pocket costs.

After age 65, you are eligible for Medicare, but it won’t cover everything. And, if you retire before you are eligible, coverage can be prohibitively expensive. Use the Planner to understand these costs and get tips for how to pay for them.

13. What’s your plan for a long term care need?

About 70% of of people who turn age 65 will need some type of long term care in their lifetime, according to the U.S. Department of Health and Human Services, but few are prepared to pay for that care.

There are many options for funding this care. Find out what will work best for you when you use the NewRetirement Planner.

14. How are you planning for other unknowns?

Inflation, stock market crashes, natural disasters, car accidents, and more. There are so many potential risks that could impact your financial well being.

It is important to have a best case and worst case retirement plan. The NewRetirement Planner makes this easy with optimistic and pessimistic scenarios.

15. What trade offs do you need to make?

Any retirement date is possible — especially if you are willing to make some trade offs.

There are so many different ways to retire. For some retirement means having millions in savings. Others can cut costs dramatically and live on Social Security alone. There is no one right way.

Hundreds of different levers can be adjusted to help you discover a plan to retire at an age that suits you. Use the NewRetirement Planner to plan your trade offs.

16. Do you know what you want to do next?

When you ask yourself, “When can I retire,” are you trying to get away from something or to something?

A study from Merrill Lynch found that 9 out of 10 boomers see retirement as an opportunity for a new beginning — not an end of something. Retiring to something can be critical to your retirement happiness.

It is even better if what you choose to do in retirement is meaningful. Research from Oxford University finds that a meaningful life lessens the effects of aging.

17. Have you fostered the life skills you’ll need?

You are probably thinking, “What in the world? Life skills? I am a grown person on the brink of retirement. I’ve made it this far.”

Yes, you have made it to retirement, but this new phase of life is enhanced with the right life skills like: knack for dealing with uncertainty, resilience, being a good friend, self motivation, a purpose and more.

Explore the 8 unexpected skills you need for a happy future.

So, are you ready to retire?

The easiest way to answer the question is by creating a complete retirement plan.

The NewRetirement Planner will help you address all of the questions asked in this article and more. Get started today. Find your ideal retirement age.

About NewRetirement

NewRetirement was founded by financial and technology experts who discovered that their own parents — professionals who hadn’t saved quite enough — needed help figuring out how to retire. There were no trustworthy and affordable resources that addressed anything beyond investments.

Now NewRetirement helps hundreds of thousands of people every month to develop detailed DIY retirement plans and discover ways to be wealthier, more secure and feel more confident and happier about their future.