Wondering When is the Best Time to Retire? Here’s How to Know When It’s Right for You!

best time to retire

If you’ve spent a large portion of your life in the workforce, you’re probably at a stage where you’re thinking about taking a break. In other words, you’re looking forward to retirement. 

This progression of life is only natural- no one wants to work until they simply can’t anymore. The aim is to enjoy retirement to its fullest, and no doubt, you deserve it. 

But how do you know when is the best time to retire? And what should you base this decision on? Let this blog be your guide…

6 Signs It’s the Best Time to Retire 

For most people, they most likely think of retirement in dollars. How much money will they have at retirement and how long will it last?

But research has found this is not the case for everyone. There are a number of equally valuable factors involved. 

In essence, this research has shown that seniors are considering their quality of life and being able to fully enjoy it. Yes, financial and work-related factors are two primary considerations, along with Medicare eligibility and Social Security. 

But aside from this, retirees are also looking at leisure, stress levels, and the desire to spend quality time with grandchildren. 

When it comes down to it, retirement is about two key factors: finances and personal values. This means you’ll need to determine the lifestyle you want and if you can afford it. 

Here are 6 signs the time is right for retirement: 

1. Your Retirement Portfolio 

This is otherwise known as how much money you have in the bank in terms of your retirement savings. And when you retire, your retirement portfolio takes over the role of your employer who cuts your check each month. 

With this in mind, it’s important to evaluate whether your retirement portfolio is up to the task and in-line with the type of retirement lifestyle you want. A great way to evaluate this is to set your withdrawal rate at 4 percent. Otherwise, your retirement savings should equate to 25 times your expected annual withdrawal. 

If your retirement portfolio is not quite up-to-scratch, you may have to invest a little longer in the workforce, or work part-time, to supplement your income. Or, you can make cuts to your retirement budget. 

2. Your Retirement Bucket List 

Before you dive into retirement, here’s a simple way to avoid what’s known as retirement remorse. If you can answer these three simple questions, you could be in a good place to retire: 

  1. What do I want to do during my retirement? 
  2. Where do I want to spend my retirement? 
  3. Who do I want to spend my retirement with? 

These may sound like simple questions, but they’re actually quite loaded. In short, you should have a clear idea of how you want to spend your retirement and whether you’re financially ready for it. 

An important tip: if you’re looking to retire just so that you escape your job, this is a red flag. It’s not necessarily a good idea and it might be worthwhile to work on a retirement plan first before making this big life decision.

3. The State of Your Health 

This doesn’t only apply to you but also the health of your spouse. If you’re in good health, you most likely have a few good years of work left in the tank. But this is completely different if you or your spouse are not in good health.

By delaying your retirement you may miss out on opportunities that you had planned for this time in your life. This is especially important if you planned on an active retirement of travel, etc. 

You’ll need to be very honest with yourself about the state of your health and your spouse and whether you can afford to delay retirement or not. 

4. Investment Market Trends 

Your retirement investment is most likely what you’ll be drawing off of in order to maintain your lifestyle. And investment returns are extremely important in your first decade of retirement. 

You’ll need to consider market trends at the exact time you plan on retiring. If you choose to retire in a bull market, your investment is likely to build enough padding. This means you’ll be able to stretch your retirement funds a little further.

However, retirement in a bear market is the exact opposite. Withdrawals off your investment during this time could only increase your odds of running short on funds.

While investment markets are often tricky to predict, it’s wise to delay your retirement if the economy is on the cusp of a downturn. The same goes for significant losses on your portfolio in the lead up to your retirement. Allow your investments a chance to recover and gain some padding. 

5. Health Care Funding 

Research shows that the average 65-year old retiree couple requires $200,000 – $400,000 to cover their health care needs during retirement. This is over and above the health care needs and costs that are covered by Medicare. 

You’ll need to have a legitimate plan to cover these medical expenses during your retirement. You may have private insurance, medical savings or a Medicare supplement policy, but medical care funding is paramount. 

6. Spousal Agreement 

Do you and your spouse want the same things when it comes to retirement? Are you on the same page about the type of lifestyle you want to live, where you want to live, etc? 

It’s so important to speak openly and honestly with your spouse about your expectations and values in your retirement. This way, neither of you are blindsided by this major life decision when it comes down to it. 

Plan your retirement together, as a team, rather than planning things separately. You’ll get to build your retirement life together, from scratch, and what’s more exciting than that?  

Quality Financial Advice for Your Retirement

If you feel like it’s the best time to retire, Navigation Wealth Management is here to help you make your retirement a reality.

And if you’re looking for a financial advisor to help you navigate the financial headwinds of retirement, look no further. Schedule an appointment with our team and we’ll help you get your finances where they need to be… 

Luke Will is a Registered Representative of Park Avenue Securities LLC (PAS). Securities products offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Third Coast Advisors is not an affiliate or subsidiary of PAS or Guardian. 2019-86902 Exp. 10/21

This educational third-party material is being provided by Luke Will Director of Investments, Navigation Wealth Management as a courtesy. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.  Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.  

Luke E. J. Will

Luke E. J. Will was born and raised on a farm in Watertown, WI. His values and ideals were shaped by his hardworking family and are embedded into the relationships he builds with his clients. Luke has built Navigation Wealth Management with Kurt Zipp to deliver the “Navigation Way” of financial planning and asset management to his clients from all walks of life. The “Navigation Way” is built upon Trust, honest conversations, and understanding his clients financial goals.Luke attended the Wisconsin School of Business at the University of Wisconsin-Madison, where he earned his Bachelor’s degree in Finance, Investments & Banking.His favorite hobbies are hunting and fishing with family and friends. He is loves spending time outdoors including snowboarding, skiing, kayaking, and camping while spending any extra hours with his family, watching all the sports teams in Wisconsin play. Traveling, music concerts, and reading are few other interests.