1/18/2013 8:15 PM ET|
How to tell if it's time to retire
It's not always easy to figure out when to move on. Here are 5 questions to ask yourself or your family before you turn in your notice.
You're never supposed to quit your job without having another one lined up. But I have -- and the very next day I got an offer for a much better job.
Then again, at the time, I was in a relationship that was a good two years past its expiration date. I kept trying to make it work because I didn't want to be a quitter.
Knowing when to quit and when to hang in there is tricky business. Some people famously go on and on: Investor Warren Buffett (82), media magnates Rupert Murdoch (81) and Sumner Redstone (89), the Rolling Stones (who concluded their 50th anniversary tour last month) come to mind.
Others bail when they presumably could continue: Cabinet members Timothy Geithner and Hillary Clinton, Sen. Jay Rockefeller and the White Stripes, to name just a few.
Sometimes life doesn't give us much choice about when to quit. Health problems or a bad economy can make the decision for us. Bob Carstensen of Lexington, Ky., was laid off from his job at IBM one week before his 62nd birthday, after nearly 44 years on the job. (Carstensen said he is "loving every minute of retirement, but I miss the team I worked with.")
Merv Hanson of Seattle, an avionics technician, was forced out of the work world six years earlier than he had planned because of stage 4 pancreatic cancer. (For those not familiar with cancer stages: There is no stage 5.)
In 2011, Hanson changed his Facebook page to show he was "working at surviving cancer" and took the Alaskan cruise he and his wife had always wanted to take.
Others get a gentle shove from incentives to quit. Reggie Crowley, a mechanic for the New York State Parks system, was given an early retirement offer he couldn't refuse.
"If I didn't take the incentive, I would have had to work another seven years to make the same amount," Crowley wrote on my Facebook fan page. "No brainer."
For many, though, it isn't easy to decide whether or when to pull the plug on a job, a career or a working lifetime. (I won't even try to deal with pulling the plug on a relationship -- you'll have to visit Oprah's site for that.)
Financial planner Christine Fahlund has the same advice for the undecided, whether they're new mothers struggling with whether to stay home, people contemplating a career move or those trying to figure out when to retire: Don't quit until you have clarity.
"If you're on the fence, keep working," said Fahlund, a senior financial planner and vice president of T. Rowe Price Investment Services. "You might as well keep that salary and those benefits while you decide."
People need to be emotionally as well as financially ready to quit, Fahlund said. That often requires time for reflection -- and for saving up.
Here are some questions to ask yourself before you give your notice:
Can I afford to quit? Here's where good saving habits come in handy. When I quit my feature-writing job at the Anchorage Daily News way back when, I had an emergency fund that could sustain me for several months. When my next job, covering politics for the Anchorage Times, ended two years later, I had enough savings to last a year without touching my retirement accounts. A fat emergency fund and careful spending habits can mean less panic when you're facing a gap between paychecks.
If you're going to be without a paycheck for years and potentially decades -- if you're thinking of retiring, in other words -- the stakes are a lot higher. So many variables are beyond your control. You don't know how long you'll live, how the markets will perform or what inflation will do to your spending power. You can take some of the guesswork out of the equation by using retirement calculators (find one on Bing)), that use probability analyses to determine your likelihood of success. Another good idea is to run your plan past a fee-only financial planner, who can make sure your assumptions aren't overly optimistic.
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