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.
More from Liz Weston:
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"How to tell if it's time to retire." Sounds like a David Letterman top 10 list. And the number one reason: They call you into a 'meeting' and tell you that you are being terminated. You are not allowed to return to your desk to clean it out or even get your coat. They get your coat and briefcase for you and will send you the rest via UPS ground. You are advised not to return to the building without permission. Then a big security guard escorts you to your car.
This is what happened to me. The next day personnel called and offered to pay for a placement agency to help me find a new job. I said "No thanks. I won't apply for unemployment. I'm probably just going to retire." And that's exactly what I did. I moved my singlewide out of the mobile home park to a residential lot 300 miles away where a singlewide mobile home is still allowed. I went from paying $3,720/yr in lot rent to paying $662/yr in property taxes. I spent 18 yrs in the mobile home park so you can imagine how much more I could've saved if I could've just placed my singlewide on a residential lot from day one. Prior to that I was renting. Renting just an apartment where I live now would cost you at least $400/mo. Isn't it time we ended exclusionary zoning?
Always always always retiring from desk jobs where its warm dry and you have a water cooler. Never any mention of us old construction workers who built all of the offices, where you have your Words wih friends. My dream of retirement is to get one of your jobs.
RECENTLY RETIRED , 6 MONTHS AGO AT THE AGE OF 64, AND LOVE IT. I WAS RAISED HEARING THAT IF YOU TAKE CARE OF THE COMPANY , IN-TURN THEY WILL ALSO TAKE CARE OF YOU. I BELIEVED IN THAT AND WORKED FOR A COMMUNITY RETIREMENT FOR 30 YEARS PLUS. I HAD COME TO REALIZE IN THE 25TH YEAR THEY ARE IN IT FOR THEMSELVES WILL BLEED YOU FOR ALL YOU GOT AND NOT EVEN OFFER YOU A BANDAGE. THEY THREATEN YOU TO FIRE YOU AND USE THE AZ RIGHT TO WORK STATE AS AN EXCUSE WERE THEY CAN TERI MATE WITHOUT CAUSE. LET ME TELL YOU, THAT THEY CAN BE. WE'LL ANYWAY I AM GLADE I AM RETIRED. I LEFT ON COULD TERMS AND THANKS FOR THE MEMORIES.
It makes sense to retire at 62, take a break and work again at 66. Here is why..
1. I retired at 62 in 2009 because I had lost all my clients earlier in the year due to the economy. I was doing well teaching part time and consulting in biz dev in marketing services. It all went to zero.
2. Social Security pays 65% of what you would get at 70 at age 62. But do the math.
1000 at 62 , 1538 at 70
But 1000 times 12 months times 8 years is 96,000. at 6 % yield you can make up the difference. And this makes you more liquid. Anyone argue that makes sense in this world. All I had to do was see Obama win in 08 my decision was made for me. The fact that the dumbies re-elected him makes my decision VERY WISE. Social Security will advise you to wait. Of course they will. And dummys listen to them.
3. Don't trust Social Security rules. One rule they dropped because smart people were using it to their advantage was that you could pay back all you earned from 62 to 70 and get restarted at age 70. They pulled it in 2010.
4. Retirement is all about cash flow. Minimize your expenses. Scale down. No more kids. No more work expenses. No more "keep up with the Jones" Relax. Think of it as an all expenses paid vacation. Do you need a lot of stuff on vacation. No. Do you enjoy it. Yes.
5. If you want more cash to buy things you want get an easy, low pressure job.
How do you know ? you retire when you want to retire.. retiring early means doing nothing all day.. .. sh*t , i will be working til i pass the hell out between the water cooler and my office..
All this article is basically saying is that you have to work until you have enough money to keep you going. not all of us make enough money in the first place to save a significant amount - one year of expenses in the bank - i'd have to win the lottery for that to happen. i find it very discouraging when the government states they are currently spending the CPP i'm currenlty contributing to people who are now on CPP. WTF. will it even be there when i retire. and how fair would that be if it wasn't. and what about all the people who work for 30 - 40 years and contribue to EI and NEVER USE IT. Where is all that money going?
augh, i hate getting up every day to go to work but i'm not where near being able to retire. so you just go to work and do your job and go home. what more can you do.
Whether you work or are retired, the government is going to squeeze all the money they can out of a person so they can give it to the 47%-------------------------------------many who are just too lazy to work, but have figured out the system.
NOTHING to be proud of but it continues!!!
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