Choosing a retirement date requires more planning than most people realize. Too often the decision is based on an arbitrary age, watching friends retire, or as a reaction to being burned out. Without proper planning many of these retirees end up returning to the workforce. The 2023 U.S. Job Market Report has noted how “unretirements” are on the rise and the data is quite shocking. Of those returning to work 22% regret their decision to retire in the first place.
Unretirements are happening for a wide variety of reasons but last year the job report noted 27% were returning to work due to financial reasons, with 21% specifically citing inflation as the primary factor. To ensure that unretirement is out of choice, not necessity, it is important to begin preparations with your financial planner/advisor years in advance of your preferred retirement timeframe.
I wish planning for retirement was as simple as having x dollars at age y, but there are many more factors that need to be considered. Before meeting with a financial planner it is helpful to ask yourself a few important questions. What does my retirement look like? What rate of inflation should I expect? How much will medical coverage cost? When should I begin taking social security income? What am I overlooking and not accounting for?
You may find that each question leads to more questions and that is okay, preferred even. Understanding the many factors involved will ultimately allow you to make the most informed decision. One that will impact the rest of your life.