Woodstock Financial Advisor – Third Act Retirement Planning —

When Is The Best Time To Retire?

When is the best time to retire? The quick and easy answer is that it can only be when a person is extremely confident that they will have enough assets and income to pay for their expenses until they are aged 85 or 90.

Now that is the short answer, but it doesn’t necessarily help those of you reading this article right now. So, what we want to do is look at many of the things that go into a particular retirement decision. 

Goals and eXpenses

One thing you have to do when you’re deciding when to retire is make sure that you have enough income and money to pay for your goals. Here, you’ll also want to consider stock market crashes and program those into your retirement plan because, if you don’t and there is a crash, depending on when and how they happen, your money could run out before you’re able to pay your credit.

So, first of all we start with the most important thing; your basic living expenses. You must consider how much you will spend each year of your retirement to pay for everything you want; your food, gas, insurance, taxes, and start with that number as a baseline. You want to select a conservative number that reflects what you’re spending each month, plus you might even throw on an extra $500 a month, maybe even $1,000, which would be $6,000 to $12,000 per year. 

Next, you need to decide when you want to purchase cars and how much you want to pay. What about projects that you want to do for your home? Maybe you want to remodel the bathroom or kitchen. These must be considered in your future retirement. Go through your list and set a dollar amount on all of your goals.

Many of my clients want to travel, both domestically and internationally. Well, you want to assign an amount of importance to that, and set a budget so that you know how much you can spend. 

Your basic living expenses are going to be extremely important and should be the least flexible number in your retirement plan.

Then the rest; travel, kitchen remodeling, buying second homes, giving money to family members, all of these things, need to be evaluated on how important they are.

Maybe you want to buy a rental home and generate some income, or grow your wealth in the final years of your life. So, you have to decide, as with everything else, how important that is and what you need to do. This is an important point to look at when evaluating retirement plans.


So, after you’ve set all of your goals and given a number 1 to 10 on how important those particular goals are, with 1 being the least important and 10 being extremely important, you want to start looking at the money you already have. You will need to look at your investment assets. How much do you have in an IRA? How much is your home worth? Would you consider putting your home towards funding your retirement goals? For most people I work with that’s a no, but some people have to consider using their homes to fund their retirement.

How much money do you have in annuities and other types of investment; real estate, precious metals, hedge funds, or private equity? You need to look at all of your investment assets, record those in your retirement plan and make sure that they are accurately labeled on how they’re invested. You must make sure that you are meticulous on how they’re invested as you will need to have the historical performance of these investments in order to make your retirement plan more conservative and stable for when you estimate the impact of market crashes on your asset classes. So, whether it is real estate, precious metals, stocks or bonds, you need to have all of them entered into your plan and calculate how a crash could impact anything in your portfolio, therefore effecting your retirement. That’s very important.


After you’ve added all of your investment assets, you need to label whether or not they’ll be used to fund your retirement. Start with your income, such as your Social Security income, pension and rental incomes if you have any, dividend, annuities, royalties, and anything else, all of which need to be in your retirement plan. You’ve got to have the income so that you know how much you need to pull out of your investments to meet the goals you have set.

One thing to consider is when you could begin to take Social Security. It may not be at the age of 62. It might be aged 70. In fact, for most of my clients, it is at 70 as it gives them the best chance to not outlive their money, to have a comfortable lifestyle, and to not have to worry about what the governments or stock markets do during their retirement. That said, I’ve seen clients choose to take it at 62 years old. It just depends on your situation. 

After you’ve inputted your goals, investments, and income, you should be able to run the projections and figure out the probability that you will live to the age of 85 or 90 and be comfortable, and be able to live the life that you want by paying your basic living expenses. With a good retirement plan, you should have an idea of your chances of achieving the financial goals that you want based on your investment assets and income.


Also I encourage you to watch my free retirement video: https://go.thirdactretirement.com/strategy     

We’ve been creating retirement plans since 2000. Click on the link below for a call with us. We can look at your current financial situation and answer decisively on the best time for your retirement. There is no cost or obligation to meet us for a second opinion on your portfolio. We will simply help you work out where you are now and where you want to be. Click here and schedule it now: https://calendly.com/thomascloud/retirement-ready-success-call. Also, we will perform an audit on your portfolio (greater than $500,000) and review that with you as well at no cost or obligation what so ever.

Scroll to Top