Decisions surrounding when, why, and how you decide to retire will be very personal, and will largely depend on your individual circumstances. These decisions will also be impacted by external factors such as the rising State pension age, and the impact of the recent pandemic on the job market.
If you’re thinking about retiring in the next few months or years; then chances are, you’ll have plenty to consider before you do. You might also find yourself wondering whether retirement is the right choice for you at all – especially as one in three people are now planning to work beyond the State pension age, and because there are many people who retire, but later decide to return to the workforce.
If you’re considering your retirement options, then it can be helpful to put together a plan in the months or years leading up to your retirement, to help you navigate this new life stage with confidence. One of the key considerations (and rightly so) that most people make before they retire, is whether they can afford it. However, the emotional impact of retirement is also incredibly significant, as the process typically involves closing one life chapter, and beginning a new one. For some, the contents of this chapter might already be very clear, but for others, it can appear foggier.
The important thing to remember is that there are no right or wrong answers when it comes to deciding when or how to retire. At one time, retirement was seen almost exclusively as a chance to wind down, and people tended to stop working at the retirement age set out by their employer or the State.
While many people are still choosing to retire at their State pension age, others are using their retirement period, not necessarily as a chance to slow down, but as an opportunity to try something new – for instance, to make a complete career change or to start your own business venture. Some people are also choosing to retire in stages, which might start with working part-time hours, or committing to new ventures that offer more flexibility and freedom.
Below, we’ve put together a list of 9 key things to consider when you’re thinking about retiring. Hopefully, these will help you to explore and write your own definition of retirement and make the most of whatever comes next.
9 things to consider when you’re thinking about retiring
1. When can I afford to retire?
Before you decide to retire, unfortunately, it’s necessary to consider when you will have enough money to live off – not just at the time of retirement, but in the months and years that follow. During complete retirement, people will usually lose the main source of their income, and will therefore need to make sure that they have enough income from other sources, such as pensions, investments and savings to supplement this.
If you want to find out how much you already have in your pension pot, how much you will end up with if you stick with auto-enrolment contributions under your employer’s workplace pension scheme, and how much you need to save for retirement, then it’s worth checking out our article here. You might also want to read our article on How the State pension works to find out more about the type of State pension you’ll get, when you can start receiving it, and how much you’re likely to have.
If you’re thinking about retiring early, then it’s also a good idea to learn more about when you can access your workplace or personal pensions, and how when you take it, can affect how much you get in retirement. Have a read of our article; How to manage the impact of early retirement, to find out more. Or, for more pension information and tips on financial planning in the lead up to retirement, you might want to visit the relevant section on our website here.
2. If I decide to retire from my job, how will I fill my free time?
When you’re thinking about retiring from your job, probably the most important thing to consider alongside your finances, is how you will fill your free time. Research shows that people can spend the first few weeks or months of retirement enjoying a well-deserved break from working life – only to become bored and restless after that initial first period has passed. Once the novelty of having lots of free time has worn off, it’s natural that you might find yourself looking for new ways to add meaning and purpose to your life, and wondering what you’re supposed to get out of bed for each day. Some people also say that they experience a loss of identity during retirement, and feel unsure what their role is in this new chapter.
To make sure that you maintain a sense of purpose throughout retirement, it can be a good idea to work out early on what you plan to do with your free time. For example, will you be helping out more with the grandkids, looking to start your own business, learning some new skills, dedicating more time to your health and fitness, or exploring activities you’re passionate about on a deeper level? Perhaps you could also start by thinking about what you do with time off work at the moment. What would you normally do in a typical week off? Do you find that by the end of the week you’re bored, and ready to get back to work? If so, then you’ll probably need more of a plan in place before you’d be ready to retire fully.
Generally speaking, it can be helpful to overplan rather than underplan, so that you always have something to keep you busy should you want it – but can just as easily turn down plans if you need some downtime. If you’re not sure how you want to spend your retirement, or even whether you’ll enjoy the things that you plan for yourself, then it’s always worth giving yourself a few different options. That way, if your initial plan doesn’t work out, then you’ll have something else to focus on.
3. Am I happy with my life right now?
A simple way to decide whether retirement could be right for you is to think about whether you’re truly happy with your life right now. Do you enjoy your job? Do you love going in and seeing your colleagues everyday? Is your job bringing real value to your life? What are the physical implications of your job? Does it leave you feeling run down and tired? Or does it help to keep you active?
How you answer these questions can be an important part of helping you to decide whether you really want or need your life to change right now, and what your reasons for retiring would be. It can also help to identify areas of your life that you feel need improvement, and decide whether retirement is the best solution.
For example, if you love your job and would be sad to give it up, but you’re finding yourself feeling regularly burnt out, then perhaps you could have a conversation with your manager about cutting down your hours, or hiring some more team members if you’re short-staffed. Or perhaps if you don’t enjoy your job role, but you do look forward to the interaction with colleagues, customers or clients, then you could explore other volunteering or career opportunities instead.
It’s possible that you could also decide that whether you’re happy with your current job or not, you want to concentrate on other areas of your life, like family, or a particular hobby – in which case, you might want to use your retirement period to focus your energy on these things instead.
As well as considering whether you’re happy with your life and job right now, it can also help to think about what could make you even happier long-term. Nearly all of us have goals, passions and interests; so it’s important to think about how we can leverage these, and whether your retirement period could help with this.
4. How does the idea of retirement make me feel?
How you feel when you think about retirement can often be a key indicator in deciding whether retirement is a suitable option for you at this stage in your journey. If you feel excited or relieved when you think about retirement, and you can think of lots of different things you’d like to do with your time, then this could signal that perhaps, it would be a positive and fulfilling move for you to make.
If, on the other hand, you know that you don’t want to carry on working, but the thought of retirement fills you with dread – perhaps due to fears of being bored or isolated – then it’s likely that you could benefit from spending some additional time planning your retirement period, and shaping it into something that will be meaningful for you.
If this sounds familiar, then perhaps while you’re still working, you could focus on taking steps outside of your comfort zone and trying some new activities, or meeting some new people. Making sure that you’ve built some solid foundations for a life outside of work, can help you to feel more confident about retirement, and allow you to feel excited about the prospect of giving more time to these areas of your life later on. Some people also find it helpful to drop down to part-time hours first, before giving up work altogether – as this can help them to adjust to retirement more slowly.
It’s also possible that the idea of stopping work just doesn’t feel appealing because you enjoy all that your job brings to your life – in which case, there’s also nothing wrong with continuing to work beyond the State pension age if you’re happy to do so.
5. What’s my retirement lifestyle going to be like?
Our work and general lifestyle are often closely linked, so it’s worth considering how your lifestyle might change if and when you decide to retire. For instance, if you currently work in a very active job, then how will you make sure that you continue to stay active during retirement? Or if you enjoy having a daily routine, then how will you create a new routine for yourself that will add meaning and purpose to your life?
If you’re a very social person, then it’s also important to consider how you’ll keep up social contact when you retire from your job. For example: do you have some clubs or classes that you’d like to join? Do you have other retired friends who you can spend time with? Would you benefit from a part-time job or voluntary role that would allow you to continue mixing with people while giving something back to the community?
For anyone in a relationship, it’s also worth considering how retirement could affect the dynamics of daily life with your partner. Is your partner retired too? And if so, how will you be sure to give each other space now that you’re not both going out to work every day?
If you’re not sure what you want your retirement lifestyle will look like, then it can help to create a vision board of what you want it to look like, so that this can help to inform and guide your decision over whether to retire, as well as the retirement planning process.
6. Where will I live?
Many of us base decisions on where we live around our work. For example, perhaps you’ve always lived somewhere that allows you to be in easy reach of your workplace – either on foot, by car or by train. And maybe you’ve had to make compromises on the size of your home, due to needing to live in an area where property prices are high.
But planning for retirement also means considering where you might live during this next phase of your life. If you’ve always dreamed of living by the coast, but your work commitments prevented it; then is this something that you could do now? Or if you’re keen to retire, but know that you’ll have to downsize in order to afford it; then where would you move to instead? Would you be happy living in a smaller place?
If you’re planning to retire completely, then it can also be beneficial to live in an area where you’re in easy reach of friends and family, or where there are things going on that are relevant to your interests. Having a support network can make it much easier to remain active in society, which is important for both mental and physical health.
7. What’s most important to me, and how can I prioritise this when I retire?
It’s really important to see retirement as your time. Perhaps you’ve given many years to raising a family, working in roles that you’ve not particularly enjoyed to make ends meet, or doing things that you ‘should’ do, rather than things you want to do.
When you approach retirement, it’s useful to approach it with the mindset of: what exactly do I want from this new stage of my life? What would be best for me? And how can I go about making sure that I find satisfaction and enjoyment in whatever I do next? This will help to ensure that any retirement decisions are entirely led by you, and are all designed to guide you towards a life path that leaves you looking forward to what’s coming next.
In an interview with Rest Less, author John D. Anderson told us that he wants people to see that it’s possible to make the second half of your life even better than the first by creating a purposeful, rewarding, and inspired plan. He said, “We aren’t limited by our abilities, but by our vision. Imagine what your future could be, seeing in your mind a future bigger than your past. Write out your vision in as much detail as possible. Then, I would recommend sitting down with a journal and thinking through how you can get to where you want to be.
“If you’ve got something that you want to achieve, then it’s about finding the process that will take you there, executing it well and repeating it until you start seeing the results that you want. When I was younger I didn’t value the power of process as much as I do now.”
8. Would I be retiring because I want to, or because others are putting pressure on me?
Many people still hold the view that a person should automatically retire when they reach the State pension age – but this decision won’t be right for everyone. Only you will know if or when retirement is right for you, so it’s important not to let the opinions of others cloud or pressure your choices.
For instance, perhaps you really want to carry on working, but are receiving input from family and friends that is trying to convince you otherwise. While it’s worth taking into account opinions from those who care for you – try to remember that the final decision is yours, and that you have every right to carry on working if you want to.
This can be particularly true if you’re thinking about making a career change at the time you would traditionally be set to retire. It’s natural to wonder what people might think or say about your decision; but in the end, it’s important to do what works best for you.
9. Is the timing right?
Knowing whether the time is right to retire will often rely on the financial, practical, and emotional side of things all coming together. It’s important that you can feel happy and fulfilled in your day-to-day life, while being able to cover all the expenses you need to. If these things aren’t quite in sync, then it might just be that you need more time to plan, and get things in order.
Or, if you find that whenever you put serious thought into retirement, you never feel ready emotionally – then it might be that retirement simply isn’t the right step for you anytime soon. It’s easy to underestimate the emotional impact that retirement can have on a person’s life. But the reality is; it’s a huge change that can take some getting used to, and it also might not be right for everyone.
Some people also change their mind about retirement after a few weeks, months, or years, and decide to go back to work. Again, this is perfectly okay, and is all part of your personal journey. We spoke to Dee Flower who, after retirement, decided to rejoin the workforce aged 68.
If you’re thinking about retirement, then you might have lots of questions buzzing around your mind over whether it’s the right move for you – and if so, then when and how? We hope that this article has helped you to narrow down some of these questions, so that you can see things a little clearer.
With so many options for what you could do with the next phase of your life, it can help to start by focusing on what you want to do. What would bring you fulfilment? And who do you want to be in the next chapter of your life?
Are you thinking about retiring? Have you swapped retirement for a career change? Or perhaps you’ve already retired – if so, how do you fill your time? We’d love to hear from you. Join the conversation on the community forum, or leave a comment below.