Are You Ready to Retire? Watch for These Clues

Throughout our working lives, the concept of retirement may seem abstract – like something “down the road” you’ll think about later. While you may be saving for the day when you can stop working full-time, you may not really know what that day will look like. How will you know you’re ready?

In a 2021 study, Savant found that approximately 20% of respondents had retired, only to return to work later. Why? For just over a third, the reason had nothing to do with financial preparedness. A lack of personal readiness sent 36% back to work, while 34% said they just couldn’t move on from working full-time. Other themes included not feeling fulfilled, an inability to fill the time, and lacking purpose.

For nearly 100 years – at least since the start of Social Security in 1935 – Americans have considered age 65 to be the point at which workers step back from their careers and begin their retirement phase. In recent years, however, more people are considering retiring sooner and continuing to work or volunteer in some capacity after they retire. Others don’t plan to retire at all.

If age or savings are no longer strong signals that it’s time to retire, what are some of the clues to look for when determining retirement readiness? Following are some additional ideas to consider:

You have something to retire “to.” It’s easy to think of retirement as getting away from a career or job that is no longer fulfilling. But without that career or job, how will you spend your time? What hobbies, interests, or activities will make you look forward to getting up each day? Savant’s chief innovation officer, Rob Morrison, stresses the importance of finding fulfillment in “Victory Lap Retirement,” which he co-authored with Mike Drak and Jonathan Chevreau. “We can’t just retire from work and not find something else to replace it,” Rob writes. “We need purpose and passion to really enjoy each day.”

You have a social life beyond work. For some people, their jobs are their identity. They socialize with co-workers or others in their industry and don’t have many friends outside of work. When they leave their careers, they no longer have the social network that supported them during their working years. Before you decide to retire, consider who you’ll spend time with: Family? Neighbors? Fellow hobbyists? Remember that even though you may be retired, your work friends may still be on the job and may not be available when you are.

You and your spouse are on the same page. Savant’s research found that 15% of those who returned to work did so because their relationship with their spouse was suffering. If your spouse is still working but you are retired, consider discussing what your partner expects from you. Will you need to contribute more to domestic duties, such as cooking or cleaning? Will you be expected to take over home maintenance, make repairs, or take on a remodeling project? If you and your spouse are both retired, does your spouse expect to spend more time traveling together or more time on activities that don’t include you?

You feel confident about handling uncertainty. Over the past few years, we’ve experienced a pandemic, travel restrictions, market volatility, rising interest rates, and higher prices. A recent estimate by Fidelity also showed that an average retired couple may need as much as $315,000 to cover healthcare expenses in retirement. Even if you’ve been a smart saver and have a solid retirement nest egg, you may restrict yourself in retirement because you’re still afraid of outliving your money. If you have a retirement plan that considers your expected lifestyle, you should have a good idea of what that lifestyle will cost and how you’ll handle any curveballs that come your way.

If you’ve been thinking about retiring but aren’t sure if you’re ready, your financial advisor may be able to provide the clarity you seek. Consider scheduling a meeting to discuss your concerns, and bring your spouse along, if you have one. Your advisor likely has experience working with individuals and couples in your situation and can help you gain perspective on what retirement can look like for you.