When Is It Time to Retire? Why the Biggest Decision Isn't Always About Money

Tad Jakes, CFP®, EA, ECA

11 hours ago

5 min read

Older couple walking arm in arm on a sunny beach, smiling at each other by the calm ocean and sandy shore.

Most retirement planning conversations focus on whether you have enough money saved for the retirement you want. But perhaps you’ve run the numbers and the portfolio is in good shape, the spending plan holds up under stress testing, and the projections say you can afford to retire.

So why can't you pull the trigger?

If you're stuck in that gap — between knowing you can retire and feeling like you're ready to retire, you’re not alone. In many cases, money isn't the real obstacle. The real obstacles are the emotional ones: identity, purpose, relationships, and the fear of stepping into the unknown.

This is the first article in a series about the emotional and psychological side of retirement — the part that doesn't show up in a financial plan but often matters just as much.

The Identity Problem

People underestimate how much of their identity is tied to their work. When someone asks "what do you do?" at a social event, the answer isn't a job description, it's a statement about who they are. "I'm an attorney." "I'm a VP of operations." That's identity and not an occupation.

A career provides more than income. It provides structure, intellectual engagement, social connection, a sense of competence and, for a lot of people, status. Most people don't realize how much they depend on those things until they're considering walking away from them.

Research supports this. A study in the Journal of Vocational Behavior found that the strength of someone's professional identity was a significant predictor of how difficult their retirement transition would be, and in some cases more predictive than their financial situation. The people who had the hardest time weren't necessarily the ones with less money. They were the ones whose identity was most concentrated in their career.

Outside Pressure

The retirement decision gets complicated when other people weigh in, and they almost always do.

Friends and family who've already retired tend to push you toward joining them. "What are you waiting for?" is a common question one can hear. But the friend asking that question has a completely different financial situation, different health considerations, different spending needs, and different family obligations. Their retirement timeline is based on their life, not yours.

Workplace dynamics play a role too. In some industries, there are strong unspoken norms about when people should retire. Sometimes the signals are more direct — a reorganization, a shift in responsibilities, a younger colleague getting the projects you used to lead.

And then there's the cultural expectation that there's a "right age" to retire. Sixty-five, or increasingly some earlier number, has become the default in people's minds. But there's nothing magical about any particular age. A client who loves their work and is financially comfortable at 68 isn't making a mistake by continuing. A client who's burned out at 57 and has a solid plan isn't being irresponsible by leaving.

When Spouses Are on Different Timelines

In my practice, couples rarely retire at the same time, and this bears out in research data. According to Ameriprise Financial's Couples, Money & Retirement research, only 11% of couples actually retire at the same time. Sixty-two percent retire more than a year apart. The reasons vary: age gaps, one spouse loves their work, one carries the health insurance, or they're just in different places emotionally.

The good news is that most couples handle this without major issues. But it does create small friction points that are worth acknowledging. The retired spouse wants to book a trip, but the working spouse has limited PTO and a full calendar. One person is enjoying a quiet Monday morning; the other is rushing to a Zoom call. These are minor things, but they can be irritating if the couple hasn't talked about expectations.

Research from the NBER has also documented a gender pattern: women tend to marry older men, and younger wives often retire earlier than they otherwise would to coordinate with their husband's timeline. That pattern can cost them future earnings and Social Security benefits, which is worth being aware of in the planning process.

The financial logistics of staggered retirement do require attention. Going from two incomes to one affects the withdrawal strategy, the tax situation, and healthcare coverage. If one spouse retires before Medicare eligibility at 65, bridging health insurance can cost $15,000 to $25,000 or more per year. That needs to be part of the planning conversation and not an afterthought.

The couples who navigate this well tend to have one thing in common: they talked about it ahead of time. Not a formal intervention, but an honest conversation about what each person expects, what the daily logistics will look like, and what financial adjustments the transition will require.

What Readiness Actually Looks Like

Retirement readiness isn't one thing. It's several things at once.

Financial readiness means having a plan that's been modeled and stress-tested — not just a portfolio balance that looks good, but an understanding of what that portfolio can produce as sustainable income and how it holds up under difficult market conditions.

Emotional readiness means you've at least acknowledged the identity question. You don't need to have it fully resolved, but you should be honest with yourself about whether your hesitation is really about the money or about something else.

Relational readiness means you've had the relevant conversations with a spouse about timing and expectations, and with yourself about what you're retiring to, not just what you're retiring from.

Independence from outside pressure means the decision is based on your situation, not on what your friends are doing or what you think the "right" age is supposed to be.

None of these are things you check off a list. It's more about being honest with yourself about where you stand on each one.

The Bottom Line

The financial side of retirement planning is critical and it’s what most pre-retirees focus on. But the decision to retire touches your identity, your relationships, your daily routine, and your sense of purpose. Getting the money right is necessary but not always sufficient.

The clients who tend to do best in this transition are the ones who gave the decision its full weight and thought about more than just the numbers.

In the next article, we'll focus on the other side of this: what a well-structured retirement actually looks like in practice, and how thinking about what you're retiring to can make the transition significantly smoother.