For some people, there is a natural progression toward retirement. They know exactly when it's time to call it quits.
For others, thoughts about when to retire make them nervous, and the decision isn't easy. Determining the right time to retire can become mind-numbingly complex when you consider all of the personal and financial factors that come into play.
For those individuals and couples who are on the fence and not sure about the right time to retire, you're not alone. Fellow boomers face the same daunting decision, as 10,000 turn 65 every day and will do so at that rate for the next 18 years.
Instead of waiting for a mystical sign in the sky or a new software program to help you figure it out, consider these seven signs that tell you that now's definitely not the right time to retire.
1. You're eligible for Social Security
Whether you surpassed the magical age of 59 ½, when you can plunder your retirement accounts with no penalty, or you turned 62 and you're eligible for early Social Security benefits, simply retiring because you hit a specific number can be a costly mistake.
"The numbers are pretty compelling for delaying retirement account withdrawals as well as Social Security," says Certified Financial Planner Eleanor Blayney, founder and president of Directions For Women. "We're all living longer. And if you're blessed with a special talent or gift in your field, it can make sense to maximize those gifts for as long as possible and delay retirement."
Retirement expert Bud Hebeler also advises to hold off on collecting Social Security. "The very best annuity is Social Security," he says. "By delaying the start of Social Security, there is an 8 percent gain each year. Social Security, unlike many pensions and annuities, is inflation-adjusted and offers unmatched spousal benefits."
2. You plan to work part time
Despite the stigma associated with becoming a Wal-Mart greeter during retirement, many people are planning to work part time in retirement for both personal and financial reasons. However, you shouldn't count on being able to find work, says Hebeler, who founded AnalyzeNow.com. "People are starting to realize that it is harder to return to work if necessary or even find a suitable part-time job to supplement retirement income," he says.
It's probably better to hang on to the full-time job for as long as you can. "Those fortunate enough to be working where their employer provides a pension or matching retirement contribution can see them grow by working just a few more years," Hebeler adds.
Before renouncing your full-time job, think through the trade-off of spending a few short years in your existing role, versus doing menial part-time work for several years that may not be satisfying.
3. Your spouse doesn't want you to retire
A successful retirement warrants approval from your partner, and it's best if you both prepare for the transition.
Financial coach Christine Moriarty says it's important to make sure your spouse wants you to retire. "If your spouse keeps saying, 'Don't retire yet, don't retire yet,' find out if it's a financial or emotional concern," she says, "and get it resolved before retiring by working with a therapist or financial adviser."
Moriarty says that similar to marriage, "The first year of retirement can be the most difficult. ... You have to get into a groove, and that can take some time for couples and requires planning outside of just the financial aspects."
4. You don't have a place to go
Face it, if you're not prepared for the time you'll have on your hands, you may find yourself wishing to be back in those boring staff meetings, drinking bad coffee and gossiping at the water cooler.
"If you're already a scratch golfer or don't have any interest in playing bridge, you can flounder in retirement," says Blayney. "People are so defined by their career that moving into retirement can be a shock as they realize they don't know how to relax and enjoy themselves."
Some signs of retirees who don't have a place to go or something to do: They're the ones driving 20 mph below the speed limit, talking your ear off in line at the grocery store or cleaning their garage twice a day.
"It's easy to think and talk about retirement -- and to even figure out all of the legal and financial metrics associated with it. But when it comes time to do it, people must have a meaningful answer to what they are going to do every day in it," says Troy Jones, CFP and owner of Access Financial Resources.
5. You're counting on the stock market
If your nest egg isn't quite large enough to sustain you through retirement, don't expect great stock market returns to make up the difference.
"You can't invest your way to wealth or retirement success by only picking the winners in the stock market," says Blayney. "People who are most successful in retirement are not necessarily the most successful investors, but instead are those who live within their means, maintain low withdrawal rates and don't rely on the stock market to maintain their lifestyle. Doing so is a recipe for disaster."
It's necessary to do all the financial calculations before retiring. "I have seen, and heard from, too many people who have retired without ever trying to understand whether they had saved enough money to do so," says Hebeler. "Now they are both looking for unrealistic investments and full- or part-time jobs and at wage rates that are like the work they did in summer vacations between school semesters 40 years ago."
6. You haven't planned for health care costs
For years, health care costs have risen at a higher rate than inflation. Then there's the specter of an unanticipated big expense.
"A friend of mine had to be medevaced by helicopter for a heart attack recently. The cost was $27,000, of which the insurance company covered only 80 percent," says Hebeler. That left his friend on the hook for $5,400.
Add premiums and copays that can exceed $25,000 a year, and those who are looking to retire before age 65 soon discover the erosive effects of medical costs on a retirement nest egg.
"Word is starting to spread about how much is needed for health care in retirement," Hebeler says. "Fidelity's pronouncement that a 65-year-old couple needs $240,000 to cover insurance premiums and uninsured medical costs is shocking by itself, but then comes the statement that this does not cover long-term care provisions."
Health care costs remain one of the biggest concerns of current and future retirees. "Retiring too early and not having the financial resources to cover health care expenses can make for a stressful and painful retirement," says Moriarty.
7. You have financial obligations
When it comes to major life decisions like retirement, sometimes the most obvious signs are the flashing red lights of too many financial commitments. Now is definitely not the time to retire if your situation mirrors any of the following examples.
- Your kids are either in college or are sponging off you while living in your basement.
- You're the co-signer for someone else's house or car.
- Your parents haven't retired yet.
- You need a new roof and siding, and your car is making funny noises.
- You have credit card debt, a mortgage, a car loan and you're still paying off your school loans.
Deciding when to retire doesn't have to be rocket science. Sometimes it's as simple as looking for personal and financial signs that tell you now is definitely not the best time to retire.