When should I retire?

Posted on June 25, 2015 by Eleanor McKenzie
Mature woman writing

For some of you this will be quite a tough query to answer, whilst a number of you will have worked out the response some time ago. The truth is, that when it comes to the question of the right time to retire, there is no ‘one size fits all’ answer.

Many of us will remember that things were quite different for our parents’ generation. Then there was a set retirement age of around 60 to 65 and people looked forward to the exact day and hour of retirement, which was selected by employers. Now we face a range of choices from taking early retirement to setting up a new business and delaying retirement to well past the mid-60s. So, what issues should we consider when trying to come to a decision?

What’s the plan, Stan?

I consulted the published wisdom of Stan Hinden, an octogenarian expert on retirement and author of “How to Retire Happy”. Stan is a retired financial writer who then continued to work as a writer with his retirement column before finally calling it a day. He says that there are three basic reasons to consider retirement:

  1. The time is right
  2. You have more compelling things to do
  3. Your job is changing

And here are Stan’s three reasons not to retire:

  1. Your work is your life
  2. You would miss your work colleagues
  3. You want to stay in the loop of your profession

Stan also points out that now people feel a lot more anxious about retirement, whereas in the past there was much less stress attached to it. The most stressful question people are asking themselves is, “Can I afford to retire?”

A financial retirement plan

A 2015 report in The Telegraph estimates that each person needs a retirement income of £14,000 per annum on average. The government suggests that you’ll need around two-thirds of your final salary once you retire, and if you want to add in things like an annual holiday, golf club or gym membership and dining out then you will need to add on another £4,000 per person. That means a couple needs an annual retirement income of around £36,000. Now may be a good time to use all the online calculation tools available, such as this State pension calculator and discover just where you are placed in this regard.

You still have time to take action, such as topping up your state pension and looking into ISAs and other savings plans. Of course, if you need to, you can always delay retirement and take the state pension at a later date than you’re allowed.

Mental preparation

The retirement budget issue is a practical one that has well-defined solutions, even if at times there seems to be a bewildering array of financial options. However, Dr Ronald E. Riggio, a psychologist specialising in organisational psychology, suggests that mental preparation is just as important as financial planning to ensure that your health and well-being remains robust during retirement. he suggest answering these questions when thinking about retiring:

  1. Does your job give your life meaning?
    If your answer is yes, then don’t retire until you really feel ready to detach from the job. Otherwise, you may have an acute feeling of loss. However, if you’ve found some other activity, such as volunteer work that absorbs you and fills your emotional needs, then you may feel you can safely retire.
  2. Do you really want to retire, or do you want a change of career?
    Quite often people feel that retirement is the solution to the stress we suffer when we’re in a job we don’t like, or we’ve grown out of. Retirement may seem like the appropriate solution if you’re in your 50s. However, it could be the wrong choice, and you may feel less stressed if you look for work you feel totally engaged with, or even start your own business.
  3. How active is your leisure time? 
    People who have very active leisure lives are often able to retire more successfully than workaholics who have little energy left for leisure activities. The former can always find ways to fill an empty day, whereas if you’re work-focused, you will find it tougher to occupy your day in a satisfying way.
  4. Are you being realistic?
    Dr. Riggio also remarks that many of us have totally unrealistic expectations about what we’ll do in retirement. It is common for people to imagine they will take up golf, learn another language or a musical instrument, but he says that if you don’t have the kind of lifestyle that might include those now, then it’s unlikely you’re suddenly going to change from crossword fan to daily tennis player.

In the end, only you can answer the question of “when should I retire?”. But now might be a good time to ask yourself all these other questions, take any necessary actions and then continue enjoying your life – you’ll retire when the time is right. Just like Stan says!

by Eleanor McKenzie

Eleanor McKenzie is a Northern Irish writer with a passion for art, literature, and red wine. She's worked at advertising agency JWT, edited a journal for a European social policy think tank and tried to teach teenagers the difference between "there" and "their". Being 50+ has not significantly changed Eleanor's life, although she finds it a handy excuse when she wants to avoid anything too energetic.