How to Know When to Retire

When to Retire

33% of Americans are so tired of their jobs, they’d happily give up eating out if it meant they could leave work behind sooner. The idea of not having to spend 40 hours a week at a desk is very appealing. But the decision to retire is not always easy.

Before you leave tedious workdays behind, you need to have a plan in place so your family can live comfortably while you unwind for the rest of your life. Here’s how to know when to retire.

How to Know When to Retire

The financial implications of leaving work can be staggering. When you decide to retire can make all the difference between a plush lifestyle and having problems making ends meet. Here are three good reasons for you to leave work.

Emotionally Burned Out

You won’t be productive if you aren’t motivated to work anymore. It’s also hard to connect with your coworkers if you’re not invested in the company’s success. If your job makes you dread getting out of bed in the morning, then you need to find a way out—and fast!


Although it may seem like fun at first, running a business can be emotionally taxing. You can’t predict whether the economy will improve or decline, nor can you determine when it might happen. There will always be an element of uncertainty about whether your business will succeed.

If that sounds scary to you, then retiring early while your business is still thriving might be a good idea.


The average American is expected to live until age 76. If you retire in your 60s with decent health, you’ll have at least a decade of life without work to enjoy.

The Best Age to Retire

The best age to retire is a matter of preference. However, the average age of retirement has been increasing.

In 2002, the average U.S. retirement age was 62 years old. By 2022, it had increased to 66 years old.

If you’re thinking about retiring soon but aren’t sure when’s an ideal time for you to retire, look at these benefits of retiring at various ages below.

59 1/2

This is the age at which you can start collecting 401k and IRA benefits without incurring a penalty. You may also be able to start receiving pension benefits at age 59, depending on your employer’s plan.


This is when you can start collecting Social Security, though your benefits will be 75% less. You’re also more likely to get your first pension from your employer.


You’ll have to wait until 65 to collect your full Social Security benefits. However, once you reach that age, you can retire from a job and collect just about every other benefit available to retirees. You can begin taking advantage of tax breaks, like the ability to deduct a portion of your medical expenses and file for a larger standard deduction.

Pension benefits are also available at this age.


If you’re 70 or older, your Social Security benefit will be at least 32% larger than it would have been at 66. Besides receiving more money each month in retirement, you would have had more time to save money and invest it. And since you’ve been working a few years longer than you originally planned, you would have contributed more money to your retirement fund.

How Much Money Do I Need to Retire

Experts recommend anywhere between 10 and 12 times your current income. So if you make $100,000 per year, you’d need to have at least $1 million saved up to retire comfortably.

If possible, try contributing about 10% of your salary every month into a 401k plan or IRA account. If that seems too high for your budget right now, aim for at least 5%. Saving a little every month will help you reach your retirement goal quicker than adding one lump sum each year.

Retirement Tips

Planning for retirement doesn’t have to be a daunting task. You can start by doing some research on what kind of lifestyle you want.

Then, take the time to talk to people who have already retired. Ask them what they wish they had done differently, what challenges they faced, and how they overcame them. This can help you get a better idea of what it will take to be financially secure in your golden years.

Here are some additional steps you can take.

Talk to Your Partner

If you’re part of a couple, make sure your partner is on board with your plan. Your retirement should be something that works well for both of you.

Address any financial concerns you may have and be sure to get your partner’s input. For example, if there’s debt that needs to be paid off, make sure you address this in your plan.


Consider how much money will come in from different sources once you retire. You must think about whether those sources are reliable enough for long-term planning purposes.

If half of your income comes from Social Security, those payments may change every few years based on inflation rates and other factors outside of your control (i.e., presidential elections).

So while it’s okay if this accounts for a portion of your total income, it shouldn’t be your only source of supporting yourself. It’s wise to hedge against any potential drops by having other income streams that aren’t tied directly into government policies, like investments.

Make a Plan for Your Business

If you’re a business owner, selling your business will be one of the hardest parts of retiring. Of course, this relies heavily on the type of business you own. In most cases, you can sell a manufacturing business faster than you can sell a skincare line, for example.

Meet with a business broker to find out what you should expect to get for your business. With this, to formulate a strategic plan for your business, consider consulting a reputable business broker. For expert guidance, like Jason Brice, you can visit their website to explore their services and resources. You may also want to consult with an attorney about how much liability you’ll have when you sell.

Prepare a succession plan for your business by choosing someone who can take over once you leave the scene and continue its success. This person should be someone who knows the business well and has been with it for years. They’ll have a vested interest in making sure that they continue to receive a salary and benefits.

Speak to a Financial Advisor

A financial advisor will help you determine what kind of retirement package you’ll need to make to live comfortably. You may not be able to work at all once you’re retired, so your savings must last long enough for you to enjoy them.

Meet With Your Doctor

In this meeting, you can ask about any health issues that may affect your retirement. You should also talk about medications and whether any lifestyle changes need to be made, like diet or sleep habits. Your doctor will help determine if it’s still safe for you to retire, as it may be more difficult to afford medical care after you leave your job.

Plan a Retirement Routine

If you don’t plan a routine and stick to it, you may find that your time is spent in aimless leisure rather than on the activities you most enjoy. To make sure you have a balanced routine, make time for your hobbies. Hobbies are great opportunities to socialize with friends or family members who share similar interests.

Volunteering at local charities will give purposeful direction to those hours when you feel restless or bored during the day.

While you’re at it, plan some social events. If your friends are also retired, you can arrange to meet for lunch once a week. If they’re still working, invite them to come over for dinner and conversation on the weekends.

How to Retire

If you’ve decided it’s time to retire, set a date. The timing of your retirement can have a big impact on how well you adjust to the post-work phase of life.

If you’re retired before age 60, Social Security and any pension benefits will likely be your only source of income. This means you’ll have to carefully manage your money so that it lasts.

Also, be sure that the timing of your retirement is an appropriate time for your business or job.

If you recently got promoted, it might be good to wait until after you’ve finished your first year in that role before retiring. The same goes for any new responsibilities or projects.

If your company is undergoing a merger with another, stay onboard to help smooth the transition. After a few months, you can leave.

While retirement is a personal decision, it affects everyone around you. Consider how your decision will impact your employees and stakeholders.

Decrease Your Workload

You can reduce your workload by taking on less responsibility or working fewer hours. You might also consider taking a vacation from work for a few days to get some distance from it. If you can reduce your workload, your mind will think less about employment and enjoy some leisure time.

Finish Pending Projects

This will help ensure that your company is ready for the transition and won’t be affected by your absence. If you have too many projects, consider delegating them to others while still working in a limited capacity.

Write a Letter

If you’re afraid to tell your boss that you’re retiring, write a letter. It can be as simple or elaborate as you want it to be. Just make sure that everything is clear so that your boss doesn’t have questions about what you mean.

Remember to thank your employer for the years of work that they’ve given you. Let them know how grateful you are for everything they’ve done. If there are any employees that you think would work well in your position, mention them in the letter as well.

If your employer is a small company, it may be more appropriate to talk with them about your plans. You can still write everything that you want to say beforehand and then go over it with them in person.

If you’re the owner of the company, send a formal email to everyone on staff. This is a great way to let everyone know that you’re leaving and why. It also gives you the chance to thank them for their hard work.

Give Notice

If your retirement also means closing your company, give ample notice to your employees. They will need time to find new jobs, and you may want to help them do so. You don’t want them feeling bitter after your departure because you never know when you might need them in the future.

If you’re selling the company, then it’s up to you how long you want to give notice. Just make sure that everyone knows what’s going on and when they should expect an announcement from their new boss.

Say Goodbye to the Grind

How to know when to retire? The answer is simple: When you’re ready to experience freedom.

Remember to talk with your employer or employees about your decision, so that everyone understands it.

You may have some questions about what’s next in life, but you can always ask other retirees for advice. When you’re feeling lonely, consider volunteering at a local charity. Or read our news section to see what’s going on in the world.