Can You Ever Be “Certain” About the Best Time to Retire?
You have the money.
In fact, as you're heading into your Golden Years, you might have more money than you've ever had at any point in your life.
The back-of-the-napkin math is clear: You can stop working.
So why don't you?
As I've discussed in my recent blog posts, the final barrier to retirement for many affluent seniors is in their decision-making process.
But if you're waiting for "green lights" from the economy or the wider world, you could end up waiting for an illusion.
1. The Illusion of Certainty
Throughout your career, gathering more data, running more projections, and eliminating risk were critical to major decisions. Doctors analyze test results. Engineers "measure twice, cut once." CEOs master their KPIs. The data leads to certainty. Certainty leads to a decision.
It seems logical that you should be able to "solve" retirement this way too. Just follow the data, right?
So:
I'll retire as soon as I hit my number.
I’ll retire when inflation cools down.
I’ll retire after the next election and I have a better idea of what tax policy will be like.
I’ll retire after this market dip is over.
In other words, "I'll retire when I'm more certain."
Unfortunately, in retirement, many of the most critical financial variables -- the future of the global markets, shifting tax legislation -- are in constant flux.
And perhaps the most critical data point of all is completely unknowable: your exact date of death, which would make it a heck of a lot easier to work backwards and figure out how much money you need, the optimal moment to take Social Security, and whether or not you should put off that vacation another year.
That's why saying “I’ll retire when things feel more certain" is basically the same as saying "I'm never going to retire.” You're setting yourself up for an infinite delay.
2. The Cost of “One More Year”
Folks who, deep down, know all this but still aren't ready to retire often arrive at a compromise:
Ok ... Then ... I'll just work for one more year and pad my nest egg.
Again, this seems logical.
But for affluent seniors, "one more year" of income usually leads to a marginal increase in savings and investment power. "One more year" is almost never the difference between a successful retirement and one that fails a Monte Carlo simulation. "One more year" very rarely creates a significant quality of life upgrade through two or three decades.
So, the return on investment of "one more year" is usually small.
But the cost of "one more year" could be enormous. Even life-changing.
If you're healthy and wealthy at 60, then the next 10-15 years are your "Go-Go" Years. It will never be easier or more enjoyable for you to see the world, hang out with your spouse at the country club, or chase your grandkids around the yard.
"One more year" could cost you one of the most precious years of your entire life, 365 days of bliss that you've been working for and planning for.
And if you or your spouse should have an accident or receive an unexpected diagnosis, "one more year" might cost you the chance to enjoy retirement at all.
3. Signs You’re Financially Ready (Even If It Doesn’t Feel Like It)
Retirement readiness isn't about certainty. It's about resilience.
If your financial plan can pass this checklist, you're probably ready to face any money issue that retirement throws at you:
Support for Core Spending Under Multiple Scenarios: Just about any financial plan works when the markets are up. Keen Wealth stress tests retirement spending plans against potential ups and downs across decades to make sure non-negotiable living expenses are covered, no matter what.
Liquidity Buffers: Folks who are too focused on "optimizing" their accounts and amounts often overlook the importance of having a cash and short-term fixed income buffer that can isolate you from "panic selling" during downturns. This liquidity should, ideally, cover 1 to 3 years of living expenses and emergencies.
Withdrawal Flexibility: Your retirement spending needs aren't going to hold steady at 4% every year. Your withdrawal strategy can't be that static either. Flexibility gives you the ability to absorb shocks without sacrificing your long-term security.
Risk Identification: You can't be certain that market volatility, inflation, or healthcare issues won't affect your finances. But you can identify potential vulnerabilities and plan ahead.
4. Reframing the Decision
The funny thing about a financial readiness checklist is that, for many retirees, it just reaffirms what they already know deep down: they have the money, and they have a plan.
The "certainty" they're really looking for is emotional.
They want to be "sure" that stepping away from the life of a doctor, engineer, or other profession isn't going to cause a profound loss of purpose and identity.
They want to be "sure" that when they wake up on that first Monday without work, they won't feel bored and full of regret.
They want to be "sure" that they're not going to drive their spouse crazy, and vice-versa.
They want to be "sure" that they're ready for a major transition away from the comfortable routine they've known for decades.
And the only way to be "sure" about those kinds of questions is … to ask yourself better questions.
Instead of asking, "Am I certain this is the perfect time to retire?" try asking yourself, "Is this a decision I can support, manage, and adapt to?"
In other words, stop thinking about retirement as a finite, one-and-done "end," and start opening yourself up to the possibilities of this new beginning.
If, after a few months or a year, you really miss work, you can get a part-time job, volunteer, or start your own company.
Turns out that country club membership was a mistake? Cancel it, stop driving yourself crazy on the golf course, and try cycling, hiking, or yoga.
You and your spouse need more personal space? Carve some out. Redesign your weekly schedule to include both time for shared activities and solo time for individual interests.
A hailstorm ruins your car? Sit down with your financial advisor and adjust your spending plan.
Your retirement is not carved in stone on day one. And neither is your financial plan. Embrace the flexibility you've created for yourself and the things that you're not sure of -- what you'll do, where you'll go, and who you'll spend time with -- will start to feel exciting instead of scary, and limitless instead of limiting.
Be More Confident About Your Retirement Decisions
You may never be completely “certain” about when to retire.
But if you work with Keen Wealth, we believe you can feel more confident about the choices you make, the options available to you, and the professional team supporting you throughout the planning process. Instead of waiting “one more year,” consider making an appointment to visit Keen Wealth so we can work together to evaluate strategies designed to help you pursue your retirement goals.
About Bill
Bill Keen is a financial advisor with over 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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