How Do You Know When It’s Time to Retire?

You Have Achieved Career Satisfaction

Many of us have career aspirations that are central to our identities. Once these have been achieved, other aspirations are likely to take their place. If you’ve reached your goals in your working life, then you can retire with confidence and satisfaction, and are less likely to regret leaving. When your identity and aspirations for the future begin to hinge on life experiences, rather than your job, it may be time to draw a line under the current phase of your life, and step into those golden years.

You Are Debt Free

Retirement can often mean a significant cut to your income. That’s why it’s advisable to retire debt free if that’s achievable for you. Having debts will put pressure on your monthly finances, and may restrict some of your options in later life. If you own 100% of the equity of your house, and have no other loans to speak off, you will be much more financially flexible. Though money isn’t everything, it will allow you more freedom in retirement to live the lifestyle you’ve been dreaming off, without having to worry about money.

See more: How to Prepare Financially for Retirement >

Your Portfolio is Performing

A diverse investment portfolio that is generating steady returns can make deciding when to retire much easier. Offering a welcome boost to your pension provision each month, a high performing portfolio may mean it’s no longer necessary for you to be working every day. At this point, it makes sense to retire and start doing all the things you have planned to do with your loved ones, and enjoy your proliferating wealth.

You Need to Rest

Work can take a toll on your health and may become an emotional burden in later life if you work in a high-stress environment. To safeguard your wellbeing now and in the future, it might be a good idea to step back from the world of work and start taking it easy. Some say health is the most valuable asset there is. Ensuring you will have a good quality of life in retirement is just as essential as having the finances to deliver it. Check in with your physical and mental health and ask yourself: do I need to call it a day?

You’re No Longer Supporting Children or Parents

Having dependants can put pressure on your finances. Maybe you’re contributing to your children’s rent or helping them purchase their first home, or maybe you have your parents’ care fees to think about. Once your children are fully independent and able to support themselves, and you don’t have parents to care for, it will be much easier to navigate your retirement finances with confidence.

You Know Your Goals

Do you know what you want your retirement to look like? If the answer is no, remaining at work for a few more years might be sensible. Once you know what you want to do and how you want to live, you’ll have a better idea of what your finances need to look like. If you have goals in mind and the finances to achieve them, the time to retire may have come.

The Market is Healthy

Retiring when the market is healthy means your portfolio is likely to remain robust and be better able to withstand future downturns and fluctuations. If signs are suggesting the economy is suffering, it might be wise to delay retirement until things return to normal. If, however, all signs point to positive market performance, you may decide it is the perfect time for you to begin the next phase of your life.

Your Spouse Agrees

Unless you have no partner, retirement is likely to be a joint decision. That means it’s crucial to communicate your hopes and dreams to each other, and plan a retirement that is fulfilling for you both. Saying goodbye to your career will have an impact on your household finances, so your spouse needs to be involved in the discussion. If your spouse is happy for you to retire, or better yet, they are also retiring, then it’s time to get excited about the prospect of your golden years together.