Deciding the Best Time to Retire Choosing when to retire is one of the most important decisions you'll ever make. People typically do so when they're older, but not every retiree is considered a senior citizen....

Choosing when to retire is one of the most important decisions you'll ever make. People typically do so when they're older, but not every retiree is considered a senior citizen. As a result, some people retire earlier than the recommended age and may not get all the benefits, while those who retire later will likely get a better payout but will have to work additional years.

Retirement is a relaxing period of life everyone hopes to make it to. However, it requires some financial stability, allowing people to enjoy the rest of their lives in peace and only work if they choose to. During your retirement, you can choose to do whatever you want — as long as you have the financial means.

What Does Retirement Mean?

Simply put, retirement is when you no longer have a job and can enjoy the rest of your life doing things you love rather than working. Most retirees are senior citizens, but others retire much earlier if they have a better financial situation. Just over 10% of people retire before 60, with others deciding to wait until after this age to indulge in retirement.

Retirement is a set of years people dedicate to completing things on their bucket lists. They spend more time with their children and grandchildren and begin to prioritize their health more with all their free time. People take this time to pick up new hobbies, learn new skills and write or read books. Retirement is different for everyone, and people don't have to retire fully. Sometimes, they may hold an easy part-time job to keep busy or supplement their income.

For financial purposes, the Full Retirement Age (FRA) is in the mid-60s. So going into early retirement can actually reduce the benefits you get long-term. Before people jump into retiring, they must examine their finances to see if it's feasible for them. Ideally, you should have had a retirement fund while working, and you might have a pension to pull from if you spent enough years at one workplace to be eligible for benefits.

Potential retirees must look at their monetary history to decide the best time to retire. Retiring may not always be an option for some people at certain stages of their lives, or jobs may force others to retire. Knowing when you're ready indicates you have a plan for the rest of your life — and it's okay if you can't retire precisely when you thought you would.

How Do You Know When You're Ready to Retire?

Everyone knows when retirement age roughly is, but people don't realize more than just age factors into whether a person is ready to retire or needs to keep working. Of course, setting yourself up for retirement years ahead of time is the best way to go, but if that wasn't an option for you, you might need to consider a few other factors.

1. Can You Afford It?

Before retiring, you must first ask yourself whether you can currently afford it. If you cannot do so comfortably, you may need to wait. On the other hand, if you don't have a pension or money saved up, you can at least draw from Social Security after a certain age depending on how many benefits you want.

It would help if you had started saving for retirement as early as possible, but not everyone has the same opportunities. Try to save around 15% of paychecks for retirement, but you should put away more if you are closer to retirement age. Then, if you have enough saved or a lucrative passive income to supplement you until you can start drawing from Social Security, you can technically retire any time you want to.

2. Do You Have Things to Keep You Busy?

You may fall into a funk without things to do in retirement, which could put you in a dark place. While less important than the financial aspect of making sure you're ready to retire, this question can help you find something to keep you physically and mentally in shape.

Many people are transitioning into a phase of "unretirement," reentering the workforce to have a job making a difference and keeping them busy rather than worrying about financial obligations. Aside from getting a part-time job, you can also take up new hobbies or return to old ones you used to do before you became too busy.

If you have children, you may choose to spend time with them and any potential grandchildren or great-grandchildren. As you move into a new phase of your life, spending time with your loved ones should become more critical than ever.

You should also look after your social life outside of your family during retirement. Get out and get to know new people, whether at a community center or by playing games online. Try something new — even if it's challenging, like video games — and you may find a new hobby.

3. How Burnt Out Do You Feel?

It's no surprise burnout has driven most people into an earlier retirement. Many people may find their worth in their careers, but others see their jobs as a means to an end. They may find fulfillment in other areas of their lives and have jobs to have money to achieve the things they find joy in. However, you may feel burnt out when you work for a long time without taking a moment for self-care or vacation.

Burnout can bring people to dark places. You may notice a change in your eating or sleeping habits, which can signal that you may be experiencing burnout. Leaving the position is likely the best option when you're in a demanding job, taking away your quality of life.

A job is never worth your mental or physical health. However, if you're closer to retirement age, it might be worth considering retiring instead of searching for another position. At some point, retirement can become a form of self-care.

4. Are You the Right Age?

Many benefits may be behind a few gates, such as your age or how long you worked at a particular place. The best way to ensure you can retire when you want is to start saving as soon as possible. The closer you are to retirement age, the more you should keep from your current paycheck.

Anyone can retire any time they want, but whether they receive full or partial benefits usually depends on their age. While you can start withdrawing money from retirement without penalty a few months after your 59th birthday, 62 is when you can begin claiming social security.

Depending on the year you were born, you may never get the full benefits of Social Security if you start pulling payments earlier. However, the FRA rests around 66 or 67, so you can expect to get the full amount if you begin taking Social Security payments then.

Late retirement — which occurs from 67-70 — awards you a greater payout. Before your 70th birthday, the law will require you to start taking money out of retirement funds and pensions. However, you will receive your maximum Social Security benefits by age 70, so you don't need to hold out on taking it any longer.

5. Does It Feel Right?

At first glance, unlimited free time and the ability to do almost anything might seem significant to just about anyone. But is it for you?

Some people might go back to work after they retire because they feel like they've lost their purpose or need the extra money. Just because everything has fallen into place to allow you to retire doesn't mean you need to that very minute. But, on the other hand, if it doesn't feel right, or you can't make peace with your decision or leave a workplace you love, retirement might not be for you.

People's average age to retire is 63, but this number depends on gender. The average retirement age may fluctuate due to economic shifts or pandemic trends, but you don't need to follow it. Instead, choose whatever stage of your life feels right for you. Then, if everything has aligned and you feel good about moving to the next step, take the plunge. You may love everything retirement has to offer you.

Plan Your Retirement Step by Step

When you retire depends entirely on your situation, not what others have done. Always keep up with your finances to determine what time works best for you. Some people may have the passive income to retire much earlier than others, while other people still may enjoy their jobs enough to continue working until they can't anymore.

While finances are a significant factor when choosing whether you're ready to retire, they aren't the only element you need to prepare. First, it would help to consider how happy you are in your current position. If you'll have nothing to do during retirement, now is the time to look into hobbies and potential vacations. Then, make the most of your retirement when you get there — or keep planning and saving for the day you'll be able to.

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