Perhaps one of the more under estimated decisions related to your retirement is knowing when you should quit working. People often just assume that once you have the money you will just instantly leave work the next day. Often this isn’t the case as money is only one part of your retirement.
Other equally valid factors to consider include:
- Health: Are you in good health when you retire? Or is poor health causing your problems at work? Do you have a condition that makes your work benefits especially useful? Or in the US, do you have affordable health insurance?
- Friends: Do you have any retired friends? Would you be the first to leave work? Are you ready to make new friends if need be?
- Family: Is your spouse ready to retire as well? Do your children or grandchildren really need your help right now?
- Career: Are you ready to leave work? Are you happy with where you will leave things? Or is there a project you want to see get finished?
- Hobbies: Are you starting a new hobby or just doing more of the old ones? Do you have all the equipment for your hobby? Do you want to try a few more hobbies before you have a reduced cash flow?
Yet despite all the factors in the world there will be just one question that will matter most: do you feel ready to retire? Notice I didn’t ask what you think, but rather what you feel. What is your gut telling you about this? If you feel a little nervous but still excited, it likely is a good choice. Yet on the other hand if you feel very nervous about it, you might want to wait a little while longer or perhaps cut back on working a slip into retirement more slowly.
Leaving work is a big decision so cut yourself some slack over worrying a bit about things. You are allowed that as long as you keep it reasonable. For example, worrying about investment returns for the next 20 years is worthless, but worrying about your asset allocation might be worth a second opinion. Focus on what you can control and plan for and let go of the rest.
Then one day you will wake up and realize with a fair amount of certainty: it is time to quit. That is when you know you are making the right choice as the doubt and the guilt vanish and you push into retirement with a big smile on your face.
So how do you think you will know when it is time to quit? Will you just follow the plan or perhaps just make it up as you go?