5 Signs It’s Time to Retire

The decision to retire is both significant and personal. While there are standard retirement ages and thresholds to gain access to benefits and accounts, only you will sense when it’s time to call it a career and move on to the next chapter. This choice could arise from a feeling of fulfillment or dissatisfaction at work, or maybe you finally feel the financial security you’ve been working toward for years. Often, it’s a combination of emotional and financial factors such as these that fuel your choice to embrace a post-career reality.

In this article, we’ll highlight five signs indicating it might be time to consider retirement, drawing on the unique perspectives and insights of three financial advisors who specialize in retirement and wealth planning.

Financial Stability and Security

Achieving a certain level of financial stability is one of the most critical signs you’re ready to retire. Put simply, you’ll likely be more comfortable retiring if you have a stronger financial cushion to fall back on and potentially support you for the rest of your life.

What do stable finances look like for retirement? It’s often different for each person and depends on a range of aspects, including:

• Lifestyle needs
• Goals
• Potential healthcare expenses

In general, though, being financially prepared for retirement may “include having sufficient savings, being debt-free or having what is considered ‘good’ debt like a mortgage you can easily pay and deduct from your taxes, and having a steady income stream from investments or pensions,” explains Jake Falcon, CRPC, CEO of Falcon Wealth Advisors.

Determining whether your finances are set up effectively for a career exit can be hard to tackle alone. While a portion of people spend years meticulously planning for retirement and contributing to tax-advantaged accounts, it’s not uncommon for some people to overlook financial planning altogether. Therefore, it’s valuable—and never too late—to sit down with an advisor to figure out what you need to do to retire on time.

For instance, according to Bridget Grimes, CFP^®, founder and president of WealthChoice LLC, an advisor can help a client understand “how much they’ll need in income sources in order to retire” or if they’ll depend “on income from their portfolio and social security,” an expert can “determine how much of a portfolio they’ll need at retirement” and “how much they need to save annually in order to get to that portfolio amount, given growth along the way.” She continues, “Deciding when someone is ready for retirement starts years in advance by knowing how much they’ll need and preparing for it along the way with savings.”

Financial stability can lay a strong foundation in your decision to retire. With it, you’ll feel empowered to comfortably accomplish your goals while staying prepared for unexpected costs and life events.

Desire to Focus on Health and Well-Being

Health is one of the most valuable assets you can carry into retirement. While healthy and energetic, you have more time to enjoy your golden years to the fullest. But realistically, it’s hard to know how what the future holds. For this reason, a desire to prioritize your health can be a driving force in your decision to finally leave your career.

After years in the workforce, some jobs may end up taking both a mental and physical toll. This can especially be the case if you’ve climbed up the ladder in your career and have an increased workload and responsibilities. Similarly, physically demanding roles—such as those requiring manual labor or long hours on your feet—can intensify wear and tear on the body. In either case, you might sense a future decline in your health and opt to retire to focus on your well-being.

Life expectancy is also never a guarantee and could influence the decision to retire while you’re still healthy. “We have clients whose families don’t have the gift of longevity. In their cases, they often want to stop work early because they are unsure of their life expectancy,” says Grimes. However, she notes that “since we are living healthier with better access to healthcare, even folks with a family history of shorter life expectancy need to prepare for a long and healthy life” and that these individuals “may plan to retire earlier than others,” requiring them to “be more intentional about how much they save.”

Retiring to preserve your physical and mental health is a personal choice, and only you will know when it’s right. However, it can be helpful to strategize with the help of a financial advisor to ensure you’re able to. “While you can’t prepare for every single possible scenario, a savvy financial or retirement planner will help you map out multiple scenarios and contingency plans that take your health and family history into consideration,” says Steve Sexton, CEO of Sexton Advisory Group.

Declining Job Satisfaction or Career Fulfillment

As your career draws to a close, you may reflect upon your past, present, and future at work. For instance, you might ask yourself whether you feel a sense of fulfillment for what you’ve done and optimism for future opportunities. For some, this can be a resounding yes. For others, it’s a flat and, sometimes disillusioned, no. Either answer can be a convincing argument for retirement.

If you feel you’re no longer getting the satisfaction you used to out of work—whether due to stress, drama, or burnout—it could be worthwhile to seriously consider whether you’re ready to retire. “Sometimes a client is just tired of the long days and emotional drain of working,” says Grimes. “Once they know they are financially ready to stop earning, the decision comes down to when they are ready to start the next chapter of their lives,” she adds.

Conversely, you might feel ready to retire because of fulfillment and pride for what you’ve been able to accomplish. Perhaps you’ve advanced to the top of your field, contributed to numerous important projects, or achieved the goals you had when you were younger. If true, you might deem your professional story complete and be prepared to take the next step.

As you move on from work, you may desire to shift focus to a slower pace, spending time with family, or adopting new hobbies. However, it can be a mistake to retire to escape work-related stress or as a way to force change without proper preparation. Sexton cautions, “While money isn’t everything, going into retirement without being financially sound can actually cause more emotional distress in the long run.” In that way, it’s critical to ensure your finances are secure so you can fully enjoy the future and feel comfortable about what’s next.

Well-Defined Post-Retirement Plan

Deciding if it’s the right time to retire can become easier when you have a well-defined plan for post-retirement. Beyond understanding how you’ll manage your savings, retirement benefits, and healthcare, it’s helpful to have a vision for what you aim to accomplish and how you want to fill your time.

“Having a defined post-retirement plan can help your confidence to retire immensely. I would go as far as to say that it is essential to having a happy retirement,” says Sexton. “Depending on your health and circumstance, retirement can make up several decades of your life – meaning, it shouldn’t be an afterthought. Thinking about your ideal lifestyle in retirement and creating a plan to execute on it is critical to your happiness and well-being.”

As Sexton points out, people often view retirement as a limited window, but it’s a significant period and without a plan, it can be daunting to know how best to spend it. Consider thinking about what you might be able to do with the time on your hands. The possibilities, depending on your situation, can be endless. For example, you could tackle long-overdue household projects, spend quality time with children or grandchildren, travel, volunteer, or even pursue a part-time job or new hobby.

Although decisions on what to do as a retiree are ultimately up to you, it can be helpful to work with a financial advisor ahead of retirement to understand what’s feasible both financially and personally. Grimes offers a glimpse of what these conversations may look like: “When we meet with clients who are a few years out of retirement, we are discussing what retirement will look like for them. How will they spend their time? Where will they live? What is their vision for their ideal life post job? And we come back to this conversation every time we meet in case anything has changed.”

Access to Retirement Benefits and Accounts

Reaching the age where you can access retirement benefits, such as Social Security, and retirement accounts you or your employer have contributed to (e.g., 401(k)s, Roth IRAs, Health Savings Accounts, or pension plans) can influence your readiness to retire. This is because it allows you to begin replacing your work income, especially if you have both as part of your retirement income strategy.

A common source of income in retirement, Social Security payments are available beginning at age 62 (but won’t be maximum until a varying later age based on birth year). Knowing the age you’ll be able to get more substantial checks can be an indicator for when to retire. However, Falcon stresses that “assuming that Social Security benefits alone will be sufficient to cover all expenses” is a common mistake and that it’s ideal to “have a diversified income plan.”

Similarly, gaining access to retirement accounts can be another path to retirement. The funds within them are typically available without penalty when you reach 59.5 years old, except for certain unique circumstances. For instance, Grimes says, “Some of our clients work for companies that allow for distributions from retirement accounts at age 55. This is very specific to an employer, but in this case, it will allow a client to take distributions from a pretax retirement account without penalty.”

While both types of benefits are available at different times and can be important pieces of your retirement plan, it’s smart to work with an advisor to coordinate their timing carefully. “Timing retirement benefits and access to accounts can significantly impact your decision to retire,” says Falcon.

Bottom Line

Understanding the optimal time to retire is unique for each person and depends on various personal factors. On the surface, it might seem that financial security plays the most integral role in determining whether to enter the next chapter. While true in many respects, other details, like health, work satisfaction, and having a defined plan can also impact your decision.

As you consider retirement, it’s important to be mindful and ensure it’s not a rushed decision, even if the signs all seem right. “Going into retirement doesn’t magically fix your problems,” Sexton emphasizes. He continues, “If you were unhappy in life prior to retirement, it’s unlikely that retirement will all of a sudden make you feel fulfilled unless you address the root cause of your unhappiness. The same goes for financial security; those who had a complicated relationship with money prior to retirement are unlikely to feel better about their money in retirement.”

Therefore, it’s vital to be intentional about your retirement and have plans in place as soon as possible. Then, when you reach the waning years of your career or feel yourself achieving the necessary financial stability to retire, you’ll be able to do it with comfort, ease, and happiness.