When is the best time to retire? by Bob Lowry


By Bob Lowry

The short answer is, when you are ready. One of the most read posts on this blog continues to beHow Do You Know When To Retire. Written over four years ago, it continues to resonate with blog visitors, with over 25,000 views at last count. Since the topic is so important to so many, I thought I’d take a fresh look at this vital question.

It is best to retire when you are ready. That is the simple truth, but, those four words cover a lot of area. How you answer the question depends on the particular focus you have in mind. Let’s look at the three key parts of the answer, as well as some additional areas that deserve your attention:

1) When you are ready financially. This is not a financial blog. Frankly, the way the stock markets and economy have been performing since the first of the year, I am glad I am not expected to make sense of it all. Even so, retirement is a huge step into the unknown that is much more likely to succeed if your finances are under control. I have written extensively about budgeting, living below your means, delayed gratification, even good debt versus bad debt, so I won’t repeat those thoughts.

Instead, let’s focus on where you need to be to feel financially comfortable without a regular paycheck. To contemplate retirement you must be very honest with yourself. Decide what type of retirement you want: lots of travel, a summer home, and more meals out than at home, or, a simple lifestyle, with most meals at home, and the house you live in being fine for all seasons. Vacations, sure. But, not a three month around the world cruise and several skiing trips to Aspen.

Then, look at your income and expenses closely, think through different scenarios, and allow for unplanned for emergency expenses. Accept that you will have to adjust as conditions change. Do those numbers support how you want to live? Then, you are very likely to be ready financially.

2) When you are ready emotionally. For many folks, their job defines them. The way we earn our living, the people we interact with, the gratification that comes from our work, even the fact that we have a regular schedule, supports how we see ourselves. Without a job we are lost. We don’t know who we are and what makes us happy when we are alone.

An open calendar or a day without structure sends us to the antacid bottle. We run the risk of over-compensating by becoming too busy with commitments and promises. Or, we sleep until late morning, stay in a bathrobe most of the day, read or watch TV to access, and have little to excite us.

Being emotionally ready for retirement means you are prepared to reinvent yourself if necessary, to live out an unfulfilled dream, to balance activity with enough time to just be still, to define yourself without a job. If you are comfortable building your day with a structure that is under your control, you are ready.

3) When you are ready relationally. It should go without saying that retirement often affects more than one person. If you are married or in a long term relationship, your spouse or partner faces a life that is every bit as different as yours will be. 

One of the biggest strains on a relationship is retirement: the long-standing “rules” are no longer clear. Too often a wife or partner finds herself defending how she has managed things for decades. The husband expects his wife to be available to do things he likes, whenever he wants. When he is bored he turns to her for ideas. If his identity has been totally work-centered, he is likely to go through a period of unhappiness, even mild depression. If the couple does not have much to talk about and lacks shared interests, strains can develop quickly.

The partner who is still working faces similar problems. She comes home to find the newly retired person has rearranged things or made changes to established routines. He may show signs of envy or jealousy over her connection to the working world that he no longer has.

I think a couple can survive almost anything in retirement except a poor relationship. Being together full time can put a strain on even the best arrangement. If you discuss potential pitfalls ahead of time, openly discuss sharing the chores, and work to develop a strong bond, you are ready.

The are two additional considerations that can affect a satisfying retirement journey: health and spirituality. Paying for health problems must be part of your financial planning. Taking care of yourself to delay avoidable health issues is your responsibility and requires a strong commitment. If you have ignored this part of your life up until now, the time to get serious is here. 

Thinking about our own mortality is not something most of us do voluntarily. But, as we enter the last third or so of our time on earth it becomes unavoidable. Following the precepts of organized religion is not necessary, but facing death without some set of beliefs about what may happen next can be especially disconcerting for many folks. Even if you think that nothing happens after you die except you return to the earth as dust, those thoughts must be addressed and any fears faced. 

When is it best to retire? The questions you should ask yourself are pretty straight forward. It is the answers that take some time and introspection. And, it is never to early to start that part of your journey.

By Bob Lowry

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