When to retire is one of those nagging questions. It’s an economical thing. It’s a psychological thing. And sometimes it’s out of our control.
With your retirement likely lasting 30 years, the thought of quitting your job in your mid-60s can be unsettling, especially when considering your future financial security.
Teresa Amabile, a psychologist at Harvard Business School and co-author of the new book Retirement: Creating a Life, says, “Money is part of it, but there are many things people face when making this decision.” There are many dilemmas.” It works for you,” he told Yahoo Finance.
You may want to leave because you have other things to do with your time, the work has become monotonous, or you don’t like the direction of the company culture, she says.
In fact, more and more workers are being forced to make this decision. A record number of Americans, approximately 4.1 million, will turn 65 this year, and that rush will continue into 2027.
Age 65 is generally considered the retirement age, perhaps because this is the age at which Americans become eligible for Medicare. For those holding onto jobs to get health insurance coverage, it’s the green light to hit the exit button.
Everyone’s situation is different, but in addition to big factors like how much you’ve saved for retirement and whether you have health insurance, there are other factors that can make the decision less difficult and help you feel less pressured to resign. there is. Amabile said.
“The ideal scenario for most people, from the president of the United States on down, is to leave whenever and however they want,” she added.
Read more: Retirement Planning: A Step-by-Step Guide
Here’s what Amabile had to say about all this and more in a conversation with Yahoo Finance’s Kerry Hannon. Edited excerpt:
Kelly Hannon: Why is the decision to retire so difficult for so many people?
Teresa Amabile: It’s not easy for people who have deeply identified with their work to leave it without losing their sense of purpose. Even people who never thought they were deeply involved in their work are concerned about finding something meaningful to engage themselves with after retirement.
Another reason why people have a hard time getting out is that people look up to you while you work. It’s a sense of pride. If you don’t find real meaning in the mundane things you do in life, it can be very difficult to get over that hurdle.
One of the key elements to getting your retirement done right is “adjusting” what you write. Can you break that down a little bit?
People who have a smooth transition to retirement and are highly satisfied with their lives after retirement tend to be in good harmony with themselves and their life structure.
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It’s about knowing what’s important to you now, not who you were before. We all have multiple identities. I’m not only a psychologist, researcher, and writer. I’m also a grandma. So these are part of my multiple identities.
You need to be aware of your identity, values, priorities, needs, personality, and even your health. Look at your activities, your relationships, the places you spend your time, the groups and organizations you belong to, and the dynamics between them. Do you have them? You may need to actively figure out what you can do to make changes in the structure of your life. Maybe it’s just a small adjustment in some situations.
Self-awareness makes all the difference for Americans confronting pressure to retire, you told me after President Biden decided not to run for re-election. How can I end it when and how I want?
Self-awareness may require working with someone you trust to talk about who you are now, what is most important to you, and what your true needs are. It could be a life partner or an adult child. This could be a trusted friend, a counselor, therapist, or life coach. We often get caught up in a view of ourselves that is no longer current.
If you hold a very high position, people will tell you what you want to hear about yourself, and if others are not honest with you, even those closest to you Even so, developing self-awareness is difficult. , it can be difficult to be honest with yourself.
People who can easily detach are objectively better aware of who they are at this moment in life, their driving motivations, passion, health and stamina. It’s not that they feel less identified with their work or their organization.
Can someone break it down into the stages that they might go through when throwing in the towel?
The first task when deciding to retire is deciding when to retire. That’s outrageous to some people.
Next, you need to decide how to retire. First, you visibly reduce your work, transfer some projects to others, transfer the knowledge you have, or handle HR paperwork.
The next part is the more difficult part, psychologically detaching from work, especially for people who are closely integrated with their work. Breaking away from just that everyday structure can be difficult even for people who aren’t so wrapped up in that part of their identity. Walking away from work relationships can also be especially difficult for some people.
Building your own interim retirement is another stage. And that often involves a significant amount of experimentation and exploration of new activities, relationships, groups, organizations, and places to spend time.
Pre-retirees tend to use scary words when they think about retirement. What exactly does that mean?
I was very surprised to find that people who are still working have such a negative attitude towards retirement. In our survey, we asked people to say the first word that comes to mind when they hear the word “retirement.”
We weren’t really surprised that young people early in their careers associated words like “money worries,” “uncertainty,” and “old age.” These are retirement stereotypes, and many young people worry that Social Security doesn’t exist for them.
What really surprised me was the number of negative word associations I got from people over 55 who were nearing retirement. They were still working. They had not yet decided when to retire. The words that stood out the most were “scary” and “never.”
It’s no surprise that many of the financially stable professionals we interviewed after leaving their corporate careers associated positive words, with almost all of them being “relaxation,” “fun,” and “amazing.” Those were the words.
“It’s hard to develop self-awareness when you’re in a very high position because people tell you what they want to hear about you,” says Teresa Amabile, a psychologist at Harvard Business School. (Photo credit ot Amabile: Harvard University;Kris Snibbe/Harvard Staff Photographer · Harvard University;Kris Snibbe/Harvard Staff Photographer
The question then becomes, what role do our finances and health play in all of this?
Health and wealth play important roles in people’s retirement decisions. People often make decisions when they feel they have enough savings, whether it’s at age 58, 62, or 65. They look at their Social Security and their savings and say, “Okay, I did the math.” You can do it. ”
But poor health can force you to go through that gate before you feel ready.
Do you have questions about retirement? Personal finance? Career related? Click here to send a note to Kerry Hannon.
How is retirement different for this generation compared to previous generations?
Baby boomers are generally in better health than their parents when they retired. Improvements in general physical health have led to a significant shift in people feeling more active in retirement compared to our parents’ generation.
We can expect to live longer and healthier lives in retirement. That’s the biggest change.
Another trend I’ve noticed is that attitudes toward retirement are changing. Once upon a time, we had the stereotype that retirees were sedentary, focused only on leisure and downhill pursuits. Retired baby boomers are changing that image. They participate as volunteers and continue to work with the desire to live their lives to the fullest.
If you were to give advice to Gen Xers in their 50s, how should they start thinking about self-awareness and retirement?
If you’re in your 40s or 50s and are focused on your career, I encourage you to start thinking about what other interests or even passions you have in life and what you might want to invest in more heavily in retirement. I will. . That will give them the feeling that they are moving towards something really positive and really exciting, rather than jumping off a cliff into the void.
Kelly Hannon is a senior columnist at Yahoo Finance. She is a career and retirement strategist and author of 14 books, including In Control at 50+: How to Succeed in The New World of Work and Never Too Old To Get Rich. Follow her on X @Kellyhannon.
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