Home > Personal Finance > Is It Time for You to Retire?

Comments 0 Comments
Advertiser Disclosure


Retiring can be a frightening subject. Where is the income going to come from once you pull the plug? How much will you need? How will you spend your days? These are all important questions you have to address. But what if you don’t have the answers?

The last thing you want to do is get this wrong. If you retire too soon, you may be forced back to work but find it very hard to land a job. If you retire too late, it can cost you your most precious treasure – your time. How do you know when it’s time to retire?

The best way to work out your answer is to change the question a little. Instead of asking when it’s time to retire, ask yourself why you can’t right now. As I see it, there are two reasons you might still be punching the clock.

Financial Obstacles

The main reason why people hold on to their jobs is because they need the money – or at least they think they do.  Of course you might have to work right now – but are you sure?  In my experience, many people work far longer than they really have to.  Are you one of them?

The only way to really know is to run some financial projections.  Don’t worry – you don’t have to hire a fancy financial planner to do this, you can do this all by yourself.  All you need is a little information:

  • How much do you spend now?
  • How much do you think you’ll spend when you retire?
  • What will be your pension/Social Security income?
  • How much income can you derive from your investments?

Once you have this information you’ll know where you stand.  If the picture isn’t as rosy as you hoped, you can probably take steps to change the equation a bit.  I recently got off the phone with a client who was worried sick about her future.  She was convinced that she’d never have the scratch to retire. But then she had a change of heart.

She realized that if she just sold her home and moved to a lower-cost location, she could basically retire whenever she wanted to – including right now.  That move would free up capital to create more income, plus it would eliminate the cost of home ownership. True, she’d have to rent. But that would be far less expensive than maintaining a home. In this case, it was a great solution that created a lot of freedom.

So if you want to know if it’s time to retire or not, your first order of business is to gather the information to answer the four questions above. Keep in mind that once you retire your health care might be more expensive so you’ll have to add that back in. Also, you may lose your life insurance. That may not be a big concern because you may not need it at that point. Still, it’s important to address the financial side of retirement with eyes wide open.

Personal Obstacles

Even if you can afford to retire, you may not be ready to do so. You may not want to say goodbye to your friends at work or you may not want to give up the hustle and bustle. These are real factors and it’s important to acknowledge where you really stand on the social aspect of employment.

Of course the best solution to these challenges is to get involved with people and activities outside of work.  I’ll admit that I’m lousy at this. I love what I do and I work all the time. I honestly have no idea what I’d do if I wasn’t working. When I did my numbers, I realized that this was a far greater obstacle to my retirement than the financial issue.  I’m working on it now but it’s not easy.

Bottom Line

In order to know when to retire, ask yourself why you aren’t retired already.  Figure out where you stand financially and socially. Both are equally important.  Then, be open-minded about the tweaks you are willing to make in order to make your retirement dream a reality.

Are you ready to retire?  Why or why not?

More Money-Saving Reads:

Image: Yuri Arcurs

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team