How to Tell When It Is Time to Retire

Find interests outside of work before you retire.

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Deciding the right time to start your retirement can be a tough decision. You have to make sure you're mentally ready to move on from your current career. Some people love their jobs and stay with the same one for almost their entire lives. Others start their retirement the moment they're financially able to survive without a job. You'll have to weigh a lot of different factors when determining if you're ready.

Financial Stability

Before you decide to take the plunge into retirement, make sure that your financial future is set. Don't just imagine that you can find a part-time job or gain enough in stocks to make up the difference between what you're making now and your retirement benefits. Getting a job, even a part-time one, isn't easy, and the stock market is unpredictable. Instead of relying on these things, determine if your benefits will be enough to support you if you live within your means, which can mean cutting luxury items you're currently enjoying, and if you keep your retirement withdrawal rates low. Remember that you'll also have to account for the cost of new health insurance. Sometimes delaying retirement a year or two can mean that your pension or employer-matching retirement funds will have time to grow.

Outside Interests

Some people don't plan what they're going to do after they retire, and their enjoyment of just having a lot of free time diminishes quickly. Before you retire, start finding outside interests so your job isn't your entire life when you leave. Join social groups outside of work, plan what hobbies you want to pursue or if you want to go back to school and learn a new skill. Get a plan in place before your last day so you don't get hit with lethargy and depression.

No Looming Costs

We all get hit with unexpected costs from time to time, like a car breaking down or an injury. But if you already have a lot of expenses that you know will eat away at your retirement fund, consider delaying retirement until you take care of them. The type of expenses that you don't want to deal with after retirement include sending your children to college, co-signing a loan, a mortgage, credit card debt or buying a new car.

Family Support

It's vital that your family supports your decision to retire or you'll be enduring a lot of arguments and hurt feelings once you stop working. If your spouse or children don't think it's time, consider why they feel this way. They might be concerned you're making the decision for the wrong reasons, such as because you're bored, having trouble with a boss or are depressed. Talk things out and try to resolve any worries your family has before you take this big step.