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When Is The Right Time To Retire?

Posted on November 18, 2020 By

The right time to retire is going to be different for everyone based on individual circumstances and goals. While finances are obviously a major factor in the decision, being emotionally and mentally ready is equally important. Here are some points you should consider if you are thinking about embarking on retirement.

Financial Stability
Retirement hinges upon having the appropriate income to support a comfortable lifestyle in the future. This entails having an accurate and realistic picture of what your expenses will be and how much you will need in order to cover them, including income from your savings, pensions, social security, 401ks, IRAs, and any other assets. The earlier you plan to retire, the more significant your nest egg will need to be. Waiting a few years can help you build up more financial security through tax-advantage investment accounts. So if you love what you do, a later retirement means that you can continue doing it while you shore up your savings for the future. A common algorithm for retirement planning is to have savings that are 25 times the amount of your annual expenses.

No Debt
When heading into retirement, it is advised that you make sure you do not have outstanding debt in the form of high-interest credit cards and outstanding loans aside from a mortgage or car financing, which can be taken into account for your needed expenses. By eliminating debt, your retirement income can be used for current expenses instead of past expenses and offer you added peace of mind.

The Economy
While there is no way to be sure what the future holds, if there are signs of an economic downturn, you may want to hold off on the retirement plans for a bit. This will give the markets time to recover, which will help you recoup your invested assets and retire with a better bottom line.


Health and Health Insurance
Consider your health when thinking about retirement. Do you have existing medical needs? Are you physically able to continue working? And what about your insurance? If you have health insurance coverage through your company, you will need to have a plan to replace it when you exit the business, depending on what country in which you reside. If your country provides medical coverage for all, this is not an issue for you. However, if you live in a country without public healthcare, such as the United States, you will qualify to receive government medical benefits after reaching 65 years of age. If you retire before the qualifying age, you will need to purchase your own private health insurance.


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Emergency Planning
In addition to having a plan for your everyday living expenses, it is smart to have a backup plan in place in the event of an emergency. This can mean having a separate savings account with additional funds allocated only for emergencies, or just budgeting an amount into your existing savings plan.

Social Support
You should be prepared to face a new social landscape in retirement. Consider whether you have a social life outside of work, because once you retire, you will not have that same daily interaction in your life. It is best to be part of some sort of social community before heading into retirement to ensure that you do not become lonely and feel as though you are missing out.

Other Plans
How do you plan to spend your time once you retire? It is a good idea to think of what you want to be doing with your days so that you do not find yourself sitting around in total boredom. Maybe you plan to sail around the world. Or maybe you do not want to leave the business world entirely. Some people like to invest in other business ventures after they retire so they can still be a part of something without having to carry the weight of a 100 percent stake. By knowing what you plan to do with your time, you can avoid regretting your retirement decision.

Are You Ready to Retire?
Please reach out to our M&A experts at Benchmark International to discuss your retirement options and exit planning needs. We can help you sell your company for maximum value and create a strategy for a future that fulfills your aspirations.

Schedule A Call


Americas: Sam Smoot at +1 (813) 898 2350 /

Europe: Michael Lawrie at +44 (0) 161 359 4400 /

Africa: Anthony McCardle at +27 21 300 2055 / 


Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $6B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.


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