Working out the right time to retire

It's different for everyone, but it's one of the most important questions to think about when planning your retirement. When is the right time to retire?

In some cases, people find that they enjoy retirement so much that they wish they'd finished work earlier. But then, other people find themselves feeling that they may have retired too soon.

In this video, retirement planner NOEL WATSON talks about how people can start thinking seriously about when to finish work, or even pursue options like a "phased retirement".


Robin Powell:
We often hear people say they enjoy retirement so much that they wish they’d retired earlier. But others retire and then decide they did it too soon. So, how do you work out the right time to finish work? Assuming you have a robust financial plan in place that gives you confidence that you won’t run out of money, retirement planner Noel Watson says there’s no time like the present.

Noel Watson: You’ve got that confidence in place. My first pushback to someone – or what you must think about – is: why not now? What are the blockers in place to say why not finish work now? For me, the ideal time is yesterday. But, if not yesterday, it may be tomorrow. Because you only get one life, and life is so short. The other thing to bear in mind is that some people just don’t live as long as they might hope or expect. And I see unfortunately, part of my job is that some people get a really unfortunate illness and their life is tragically cut short. Just really, really sad.

RP: Something else to consider is cognitive decline. Dementia sadly is now very common. One of the best ways to ward it off or, at least to delay its onset, is to keep your brain active. So you may not want to give up work altogether.

NW: I guess it depends how you define work, because some people might say that work is a means to earn money – but for me, work is almost a way to keep the brain engaged. So if you’re very fortunate and you’ve got a robust plan behind you, volunteering you might consider as work – i.e. unpaid work – but I think giving up work and almost retreating into your shell is most certainly suboptimal. So it’s got to be – for me, the perfect retirement, has to be a mix of leisure, keeping the brain sharp, and potentially giving back

RP: One option to consider is a phased retirement. Reducing your working hours helps you work out how important your job really is to you and explore other ways of filling your time.

NW: If you’ve been working for an employer for a long time, you might go and have a chat with them and say, “look, I don’t want to working forever more, I don’t want to leave you in the lurch and finish work tomorrow, bur can we have a chat about a phased retirement?” So it could be going from five days a week to four to three, or it could on a consultancy basis. But the feedback I get from some people is that it doesn’t tend to be a phased approach for the mental workload because I think, if you’re doing three days a week, you still almost get asked to do five days work. So in reality, it doesn’t always quite pan out like that but that would be my starting point

RP: In summary then, don’t put off considering your options and making a decision. If it’s financially viable, there’s a strong argument for giving up work now. If you’re unsure about it, a phased retirement is a sensible option.