Here are 5 tips from Dr. Ruth Chang, a professor at Rutgers University and world renowned expert on making decisions, that should help you know when to retire. While Chang is not a financial advisor or retirement planner, she is highly sought for her decision making expertise. Watch her Ted Talk, “How Can Making Hard Choices Empower Us?”
Or, read below for how some of her important ideas can be applied to making the right retirement decisions.
1. When to Retire is About Emotional Values, Not Scientific Facts
According to Chang, people often think that making decisions is about facts. However, she believes that there are too many unknowns in many big decisions to actually rely on objective measures. For retirement, you don’t know how long you will live or if you will actually enjoy retirement and a million other things. You can not know the future.
So, trying to make your when to retire decision be about the hard numbers may be unrealistic and the wrong way to make the choice.
2. What is Most Important to You?
Instead of only relying on facts when deciding when to retire, a better tactic would be to assess your values and make the decision based on what is important to you.
Is financial security most important? Or, is making the most of every day a better way to express your personal philosophy.
Figure out what is important to you about the decision and you will make a better choice.
3. Assess the Pros and Cons of the Decision
Think about everything that is relevant to the decision — but remember to focus on your values and what is important to you.
Make lists and write down the advantages and disadvantages.
4. There is No One Correct Answer
Chang believes that there is no one correct answer when it comes to many big decisions. Even if you have lists of pros and cons, there is no objective truth about the best time for you to retire.
And, there are a variety of ways to make any answer work out for you.
5. COMMITMENT: The Real Secret of Making the Right Decision
Chang philosophizes that by committing to a decision, you empower it to become the right decision. Commitment is the key to a successful choice.
Chang offers the following example to illustrate her point: “If you commit to being a neurosurgeon as opposed to an investment banker, you will stand behind that path in a way you couldn’t have foreseen. You’ll actually regard the things that happen in the future differently than you would have, had you not committed to it. Suppose you go to medical school and you had no idea how tough medical school was going to be. If you’re not committed to being a neurosurgeon, you’ll take this as evidence that you should be doing something else.”
When you commit to a retirement date of say May, 2018, you can begin to do everything you need to do to make that a good decision — figure out when to start Social Security, assess where to live, etc…
If you are committed to your decision, then you can manipulate everything in your life to fulfill that choice.
Use a Retirement Calculator to Help You Commit to Your Decision About When to Retire
In addition to helping you weigh the pros and cons of a decision, a good retirement calculator can enable you commit to your choice.
If you decide to retire at 67, you could use the NewRetirement retirement planning calculator to identify all the right strategies to make this happen: Should you be saving more now? Buying an annuity? Downsizing your home? Will you have a retirement job? The tool makes it easy to try out different scenarios.
It is also easy to find out if your when to retire decision will cause you to run out of money, whether or not you can leave an estate and answer many other important questions.