Skip to main content

Things You Need to Consider When You Are About to Retire

Published September 24, 2020

5 minute read

David Ning

By David Ning

Hopefully your retirement is a lifelong goal you (and potentially your spouse) are working towards. Or maybe it’s a scary transition you have no idea if you are ready for. Regardless, it can be difficult to figure out the perfect time to actually quit work for good. If you are nearing the end of your career, here are several factors you will want to consider when deciding which year will be the start of your golden year.

Your Age Matters (Obviously)

Unless you planned (and saved) for an early retirement, age will play an important factor in your ability to retire. You won’t be able to access your 401(k) from your current employer unless you retire after you turn 55. Other retirement accounts are often even more restrictive. You likely can’t touch those before you turn 59 and a half. Furthermore, you won’t be eligible for Social Security benefits until at least 62. So unless you have a huge stash of other savings lying around, it will be hard to quit working before that.

That being said, it makes much more sense to work beyond those ages. It will help make sure your retirement income takes good care of you for the rest of your life, in most cases. Every year you delay Social Security increases your monthly benefit by eight percent. Furthermore, keeping your retirement accounts untouched just means they have more time to grow.

Your Post-Retirement Plans Need to be Ready

It’s a big mistake to enter into retirement without a specific plan for how you will spend your new-found time. Suddenly ending the career that defined you can be a major shock. Sadly, depression sets in for more recent retirees than society would like to admit. Even if you’re planning on doing some part-time work after you finish your career, it pays to remember that you are not necessarily guaranteed part-time employment.

A better way to prepare for retirement is to find a way to wind down your career while you start exploring your post-retirement options. If you’re able to work part-time or shift your schedule for your last few years of work, it can help you make a smooth transition. Hopefully you’ve already filled some of free time with new hobbies, helping you adapt to your “new normal” much easier.

Your Nest Egg

Before you start talking about retirement, make sure to speak with your financial advisor about the transition. It’s a huge mistake to retire with less than you’ll need and then just hope for the best from the market. Make sure you know exactly how big that nest egg will have to be. Then work to find a way to get there. Assuming that you can simply pick the right stocks and make up the difference with savvy investments is a good way to ruin your finances. Unfortunately, people fall into this trap all the time. Don’t join the club!

You’ll also need to come up with a strategy to withdraw money from your nest egg. After all, a retiree with simple index stock and bond funds will make withdrawals that are vastly different than the person someone who’s invested in individual growth stocks that throws off no dividends.

Remember that if you want to switch strategies, selling at a gain can mean that you need years of planning in order to reduce tax liabilities.

Sometimes There’s a Perfect Time to Retire

Some people hit a mini-lottery when they are very close to retirement age and get offered a severance package because their employer wants to downsize. Others retire when the major work project they are a part of is finally delivered. Can you see a window of opportunity to gracefully exit your position while keeping everybody happy? You may not really care much since you are thinking of quitting for good. However, exiting on good terms leaves the door open for you — just in case you want (or need) to work with them in some capacity in the future.

Don’t just look for convenient opportunities in the workplace either. Many people choose to work until their kids are through school. Paying for your kids’ college expenses can be quite draining on your finances. Plenty of parents decide to remain in the workforce at least until the tuition bills stop coming.

You should also consider if you have major expenses coming up? If so, you may want to keep working a bit longer. That way your retirement funds aren’t getting depleted by a major one-time expense like replacing your old, beat-up vehicle.

It’s not that you can’t plan for any major expenses post career. In fact, you’ll specifically have to. Major expenses are bound to still happen in the decades of your retirement, after all. But taking a big chunk out of your nest egg once you’ve stopped working can be stressful, especially if it’s happening while you are still adjusting to your transition.

Your Healthcare Costs

It used to be that you could retire at 65 with a solid pension and the company health insurance. These days, most retirees are on the hook for potential health care costs — which you may not have budgeted for. Fidelity, one of the largest custodians of 401k assets in the country, estimates that a 65-year-old couple will need $240,000 to cover medical expenses in retirement. That includes insurance and out-of-pocket costs.

If you’re considering retirement in the next few years, make sure you know how much of your retirement income might have to go towards health insurance premiums and other costs. If you haven’t prepared for that, it probably makes sense to delay retirement for a few more years.

The Bottom Line

Deciding when to retire is no easy task. It’s mighty important to approach your retirement with a clear understanding of your financial and psychological needs. It’s not always easy to get back into the workforce if you call it quits too early, and later regret your decision.

Unfortunately, there’s no guarantee that the choice you make will be the perfect one — no matter how much you prepare. That shouldn’t stop you from thinking about these factors before you quit for good, though. It will help you increase the odds that you can make the transition a successful one.

Retiring Couple Enjoying the Beach


David Ning

Experienced Finance Writer

David is a published author, entrepreneur and a proud dad. He firmly believes that anyone can build a solid financial foundation as long as they are willing to learn. He runs, where he discusses every day money issues to encourage the masses to think about their finances more often.

Explore Investing

Young tech professional with vested interest in his company Investing

Vested Interest: What Is It and How Do You Use It?

America is a leader in many things, but I’m not sure they should be proud of pioneering this particular thing. I’m talking about vested interest. (Or sometimes referred to as “golden handcuffs.) Plenty of companies use vested interest as a way to keep their employees from leaving. In some cases, people are delaying their own […]

Read More about Post Title

8 minute read

Vector illustration of stock investing Investing

How To Invest In Dividend Stocks (And Make Money)

One of the ways you can create a good revenue stream is to become involved in income investing. Income investing is all about making solid, relatively safe investment choices that actually produce regular income. This can include interest-bearing investments like bonds and some cash products. It can also include dividend stocks. If you’ve ever wondered […]

Read More about Post Title

8 minute read

stock market short seller Investing

How to Short a Stock: A Complete Guide

I first learned about short selling from my Dad. It was in the dot-com crash of the early 00s, when practically every investment was going down. Many people lost their savings because they plowed too much money into ridiculously-valued tech stocks. Looking back in retrospect, these stocks were already so high that they had no […]

Read More about Post Title

11 minute read

Man happy about investing Investing

What Are Bearer Bonds (and How Do They Work)?

A bearer bond is a fixed-income security, very similar to a regular bond. However, a bearer bond is owned by the holder (or bearer) rather than by a registered owner. The coupons for interest payments are physically attached to the bearer bond. The bondholder is required to submit the coupons to a bank for payment […]

Read More about Post Title

5 minute read


Amazon Stock: How to Buy and What to Consider

Online retailer Amazon is one of the biggest and best-known companies in the world today. Its popularity (and value) has only grown during the pandemic, as people all over the world were literally forced to shop online when retail stores were closed. Founded outside Seattle, Washington in 1994 as an online retailer of books, Amazon […]

Read More about Post Title

6 minute read

Safe investments for seniors Investing

The Safest Investment Options For Seniors

I heard a really interesting investing story recently. You see, a really close friend of mine invested in a cryptocurrency and was yield farming on what he thought was a relatively safe investment. He was doing really well for a few weeks in a row. However, someone found a way to abuse the ecosystem he […]

Read More about Post Title

10 minute read

See All In Investing

More from WalletGenius


How To Plan Your 2021 Christmas Budget

As much as I love gift-giving and the holiday season in general, I often find that it sneaks up on me. If you’re anything like me, you often find yourself in mid-December scrambling to get presents bought, wrapped, and even mailed. That last minute scramble often means paying more for gifts than you intended, since […]

Read More about Post Title

7 minute read

Financial Advice

How To Avoid Paying These Hidden Fees

One of my good friends is a financial planner. He recently told me something very interesting about hidden fees. He basically said that his income comes from the fees that he charges his clients. They are typically based on a percentage of the client’s assets. That means that every quarter (or annually), those fees are […]

Read More about Post Title

8 minute read

Financial Advice

How Do You Justify Your Debt?

Most of us are well aware how debt works. We know we shouldn’t buy things that we can’t afford. Instead, we know we’re supposed to save up for major purchases. It’s just smart financial sense to not make a bunch of purchases that drive up your debt. However, when it all comes right down to […]

Read More about Post Title

8 minute read

Woman stressed from overworking Financial Advice

Are You Actually Working Too Much?

Our society just idolizes “more” for some reason. We often talk about the mentality of “keeping up with the Joneses” in the context of material possessions often. However, I’ve noticed lately that people are just as impressed with those who seem to be “doing” more — and no, not doing more at work. We also […]

Read More about Post Title

8 minute read

Woman working on her finances Financial Advice

Easy Ways to Simplify Your Finances

“Life is really simple, but we insist on making it complicated.” – Confucius Personal finance is surprisingly simple. Live below your means. Invest for the long term. Keep at it. Prosper. Yet, we instinctively want to complicate the process because we can’t trust that something so important can be so simple. I mean, how can […]

Read More about Post Title

7 minute read

Flipping Houses Home Ownership

How to Start Flipping Houses (And Actually Make Money)

House-flipping is often portrayed as a foolproof path to quick riches. While this inaccuracy can create unrealistic expectations, flipping houses can definitely be profitable if you do it right. And that’s the trick: the people most successful at flipping houses are generally the most experienced. That said, they all started somewhere. There’s nothing like completing […]

Read More about Post Title

6 minute read

TSP Loans Loans

TSP Loan: Everything You Need To Know

TSP loans are specialized loans designed for employees of the United States federal government. They offer federal employees access to a unique loan class that uses their retirement plans to finance their borrowing needs. Financial advisors often liken them to the 401(k) loans available to members of the general public. Yet, TSP loans differ from […]

Read More about Post Title

5 minute read

Trusted provider of accurate rates & financial information