Ready for Retirement? - Some Questions Worth Considering

At a recent gathering, a colleague from my company and I were discussing the impact of the bear market on retirement, since he knew I had already taken early retirement. He said he was still considering the timing of his retirement and shared his criteria in the form of five questions. He believed that once the answer to all five questions was yes, it was an appropriate time for him to retire.

Overall, I thought he had a reasonable set of questions. Here are his questions that he shared with me:

1. Are you tired of what you're doing? His point was that if he enjoyed his work, there was no need to retire. Why quit something that he enjoyed?



2. Do you have enough financial resources? Simply, would there be enough funds to support a desired lifestyle during retirement. We agreed that in these economic times, it's difficult to have a firm number on which one can depend.



3. Do you have other interests? He believed if work was the only interest, there would be nothing to which to retire.



4. Are others ready for you to be at home? He felt that his spouse needed to be receptive to having him spend a significant time at home.



5. Are you past your peak? This was the most interesting to me, and the one we discussed the longest. His opinion was that once someone's career was on the decline, it was only a matter of time before they were no longer competitive, and at risk of being laid off.

While I understood the basis for his questions, I told him my criteria was simpler, only being three questions.

1. Was I tired of working full time? For me, it was a question of working full time or retiring. If I wanted to continue full time work, I would have continued with my career.



2. Did we have sufficient financial resources? This was a tough question to answer. Eventually, I determined we needed 20 times my salary. We did achieve 23 times, but it has since fallen to 13 times, near the minimum needed, due the stock market decline.



3. Would we have good health insurance coverage? We wanted to have insurance equivalent to that which I had while employed. As a retiree, we qualified for health insurance from my company.

Once I could answer yes to these three questions, I was ready to take early retirement.

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This is not financial, career or retirement advice. Please consult a professional advisor.

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