When should you retire?

You’ve spent decades in the working world, and now the question must be asked: When is the right time for you to retire?

It’s a decision that requires careful consideration and a detailed, honest look at your life. Where do you stand financially? What about your mindset? Are you emotionally ready to transition to a phase of life that isn’t focused on work? To what extent does health factor into the decision? And what about the many other personal considerations involving family, lifestyle and your vision of the future?

While this could be one of the toughest decisions you make, try tackling it from three perspectives: (1) financial, (2) personal, and (3) medical.

1.           Financial considerations.

              •            What type of lifestyle do you envision for your retirement?

              •            How much have you accumulated for retirement, including investments, retirement accounts, cash reserves, real estate and more?

              •            What do you project your monthly expenses will be?

              •            How much income will you have from sources such as Social Security or pensions?

              •            What’s your plan for covering health care/medical expenses?

              •            Are you supporting a family member or friend who relies on you for income?

2.           Personal considerations

              •            How will you fill the hours you once spent working and commuting?

              •            Are you the type for whom it makes sense to phase in retirement, where you taper your work schedule instead of stopping altogether?

              •            Will volunteering your time and expertise to support a cause or organization bring meaning or purpose to your life?

              •            What hobbies do you want to pursue?

              •            Do you have grandchildren?       Do you want to spend time with them?

              •            Will you have enough social connections to stave off isolation and loneliness?

3.           Medical considerations

              •            How long do people in your family tend to live?

              •            Do you want to take advantage of retirement while you are in good health?

              •            Does your spouse need care and require more of your time?

              •            How will you stay active both physically and mentally?

While the first several year of retirement are often exciting, have you planned or thought about the challenges and obstacles of advanced aging?

Given the many moving parts, I would recommend starting the process of planning for retirement well in advance of your actual target date.

 It is not unusual to start this process five or 10 years ahead of time! Answering these questions, some of which are emotionally charged, will take introspection and honest and open communication with your spouse and family. Also keep in mind that your plans or goals might change – and that this is a normal part of the discovery process.

JASON E. SIPERSTEIN, CFA, CFP, is the president of the Financial Planning Association of Rhode Island and president of Eliot Rose Wealth Management. He can be reached at jes@eliotrose.com.