Is There a 'Best' Time to Retire? Factors To Consider

group of adult friends on sailboat dangling their feet

The average age of retirement in the United States is 61, which is up from 57 in 1991. But averages don’t define your own life. There’s no universal right time to retire, and for some people, retirement is never in the cards.

Many residents in HumanGood Life Plan Communities choose to work part time. Others take on consulting work, turn a hobby into a small business or even build a second career. Retirement doesn’t have to mean stopping and can mean vastly different things to different people.

When is the best time to retire? And when you know it’s the right time to retire, what can you do to shape your ideal future?

Financial Assessment To Determine the Best Time To Retire

Retirement can be expensive, especially as your needs change. Ideally, you’ll be able to live off of the interest from your investments — maybe with the help of monthly Social Security payments. For most people, though, this is an unrealistic goal. That leaves you to calculate how much money you have, what you intend to do with it and how long it’s likely to last.

It’s time to gather all of your bank and investment statements, then take a look at your current spending. At your current rate, could you continue to afford to live a comfortable lifestyle? Where could you cut expenses? This can help you better understand where your money is going and possibly eliminate some unnecessary expenses.

If, like most people, you need to rein in your spending or increase your investments, your next step should be to meet with a fiduciary financial advisor. Some questions to ask include:

Should we change the current balance of my investment strategy to earn more?
How might working and investing for another year or two affect my financial bottom line?
Are taxes going to significantly eat into my retirement money?
How might part-time or consulting work fit into my retirement plans?
Would selling my home and downsizing be a prudent move? How much additional money would that likely offer?

Earning Power

Once you have a general idea of your financial state and the quality of your investments, it’s time to assess your current earning power and how that might impact retirement planning. For many people, earning power is highest late in their career. That’s especially true if you’re a high earner; even another year or two could greatly increase your savings. Combine additional income with a reduction in expenses, and you could generate significant savings in a short period of time.

What does all this mean? You need to weigh the financial benefits of continuing to work against the potential drawbacks of doing so. Your financial advisor should be a part of this discussion; they can also help you look at the financial impact of going down to part-time or consulting work. Some factors to consider include:

Career satisfaction and identity: Do you like working? If so, it might not be time to retire yet, especially if you need to earn more. Many people derive a significant sense of identity from their work.
Family needs: Your family loves you, and your relationship with loved ones is key to a happy, healthy, balanced life. Is your spouse ready for you to stop working? Is your job taking you away from grandkids? Life is about more than work, so be sure to think about work-life balance.
Health: Your job can take a toll on your health, especially if it’s high-stress. Conversely, the structure of your job may actually improve your health or keep you more physically active. Consider how work affects your health, and chat with your doctor about how to live a lifetime of good health.
Finances outside of earnings: Outside of your earnings, what is your financial picture? Are you hoping to sell your home? If so, be sure to consider how this could generate additional funds.

Do You Want To Retire?

Even if all signs point to retirement and even if you can make the finances work, choosing the right time to retire comes down to one critical question: Do you want to retire?

You don’t have to do what other people want, leave your job at a specific age or live your life like everyone else. If you would prefer to keep working, then consider doing it for a few more years. In many cases, it may be possible to scale back and still live a retirement-like lifestyle, such as by working part time or taking on a lower-stress job. Indeed, many Life Plan Community residents have done exactly that while enjoying the benefits of a welcoming community.

Dr. Sara of The Terraces at Los Altos has built a career as an inspirational speaker and author, including of the book “Prime Spark: Women Over 55, It’s Our Time!” For her, retirement has never been about slowing down.

photo of Dr. Sara, resident at Terraces at Los Altos “I believe we are on the cusp of major social change, and it’s very exciting,” Sara said. “We are about to see the ascendency of women over 55 standing up and saying, ‘OK, it’s time for a change. We are dynamic, involved, contributing, powerful, desirable and vital to our communities.’ I wrote this book for older women who want to thrive, change the way our culture depicts us, and make the best choices during our prime years.”

Spend some time thinking about how retirement feels for you, then assess whether there are any changes you hope to make in your career. For some, retirement might mean a career shift rather than a career end.

Your Ideal Retirement

Whether you’re planning to retire now, next year or a long way into the future, envisioning your ideal retirement can inspire you to keep saving and support you as you compare living options. Here are some factors to explore:

Where do you want to retire? Retirement is a great opportunity to change locations to be closer to family, more resources, better medical care or the climate of your dreams.
What is your ideal living arrangement, and how might it affect your budget? Selling your home is a great way to fund your retirement. A cozy apartment, a Life Plan Community or even moving in with family may be part of your retirement plans. Be sure to carefully explore all options and assess how they fit into your budget.
What’s your monthly budget? This is the stressful part. How much money do you have to spend each month, and what are your expenses? How can you reduce expenses?
What are your lifestyle and personal preferences and goals? You’ve worked hard your entire life. You deserve to enjoy the next chapter. What hobbies would you like to pursue? How do you want to spend your time? What can you do to ensure you have enough money to thrive in retirement?
How might your living arrangements affect your relationships? Deep social connections are key to health at every age, yet many older adults struggle with loneliness. Consider how your home may impact your relationships. For example, moving closer to family might mean more time with them, while a Life Plan Community can be an enticing spot to visit and provide an easier way to make lasting friendships.
What are your current and potential health needs? How’s your health? What is your family medical history? Talk with your doctor about your medical needs, both now and for the future. Some people need to move closer to specialists and medical centers. Others have to consider how their home may impact their health. For example, if you have joint pain, a two-story home may exacerbate the condition. Isolation can be devastating for someone who struggles with depression, and access to walkable greenspaces may inspire you to become more physically fit.

The Right Time To Retire Is as Unique as You Are

A Life Plan Community can help you build a happier, healthier, more relaxing future whether you retire now or keep working. In fact, many residents keep working when they move. Others shift to volunteer work, political activism or nurturing new hobbies. No matter who you are, the right community can nurture meaningful social connections, a more purposeful life and plenty of opportunities for fun and personal growth.

photo of Jerry and Kay, residents at Las Ventanas at Summerlin For Jerry and Kay at Las Ventanas at Summerlin, retirement has been about building meaningful connections. “You might not think you are ready, but move into a great community when you are younger so you can be fully involved, make great friends and enjoy all that is offered. It keeps you young!” they said.