most important factors in your decision to retire

The 5 Most Important Factors In Your Decision To Retire

Making your decision to retire is a difficult one.  

So many factors.  So many uncertainties.  So many unknowns.

Which factors are most important, and which aren’t?

Among all of the factors you need to evaluate in your decision to retire, there are 5 that I consider the most important, and one that doesn’t really matter at all.  And yet, many people consider that one to be the most important in their decision.  Strange, that.

 If you’re making your decision to retire, today’s post will help you focus on the things that matter the most.  And, perhaps, to think less about the one that doesn’t really matter.

What are the most important factors in your decision to retire? Which is least important? Today, we answer those questions. Click To Tweet

factors in decision to retire

5 Most Important Factors In Your Decision To Retire

A few years ago, I was working through my decision to retire. I was pretty obsessive about it and documented the many factors I was evaluating on this blog (stored in chronological order for your convenience).  After doing my homework, I decided to make the jump in June 2018.  

In the four years since I’ve never regretted my decision.

The decision to retire is complicated and there are many factors to consider.  Consider them you must, however, so I’m listing the factors I consider most important and one which I consider essentially irrelevant.  To make your best decision on when to retire, it’s important to recognize all of the things that matter, as well as those that don’t.  Under each factor, I’ve included links to relevant posts for those of you who’d like to dig deeper.

The Most Important Factors

1. Do You Have Enough Money?

The first thing most people think about when they’re making the decision to retire is whether they have enough money to last for the rest of their lifetime.  Fair enough, and I’ll concede it’s way up on the list.  I’d warn, however, that having enough money is a necessary factor, but far from sufficient.

I’ve written many articles on evaluating whether you have enough money to retire.  Below are four that I’d recommend: 

2. Are You Mentally Prepared For Retirement?

Almost everyone thinks about money when they’re making the decision to retire, but far too few consider the non-financial factors.  If I were to choose one point to make from all the things I’ve learned in the 7 years of writing this blog, it’s that the non-financial factors are the most important for putting yourself on track for a great retirement. Important enough that I wrote an entire book on the topic. 

If you’re thinking about retirement, the best advice I can give you is to spend time thinking about what you want your life to be in retirement.  Think about it at least as much as you think about the “money stuff.”  Once you’ve retired, I suspect you’ll realize #2 is actually the more critical factor.

If you’re married, have you and your spouse talked about your mutual expectations for your life in retirement?  How are you addressing any misalignments?  Trust me, you have some.  Take the time to find them now, and discuss how you’re going to work together to live the best years for both of you in retirement.

What Purpose is going to fill your days when you no longer have a boss telling you what to do?  Where are you going to live?  What are you going to do?  Important stuff, all, and a topic on which I’ve dedicated thousands of words.  If you’re still working, do yourself a favor and take a “mini-retirement” to think about the things that really matter before you take the plunge.

3. Have You Made A Realistic Spending Estimate?

In its rawest form, the decision to retire is a simple math problem.  Multiply your assets times a safe withdrawal rate, add any expected income, and see if the total covers your expected level of spending.  Given the importance of getting the correct answer to that formula, it’s critical that you spend some time developing a realistic spending estimate for your retirement years.  Since you’ve thought about what you’re going to be doing in retirement (#2), it’s a necessary exercise to track your pre-retirement spending for as long as feasible (I did 11 months), then make any adjustments for how you think it will change post-retirement.  Too many people “take a swag” on this one, but I strongly encourage you to resist that temptation and give it a lot of focus as you’re making your decision to retire.

the bucket strategy

4. Is Your Portfolio Ready For Withdrawals?

One of the biggest changes you’ll face in retirement is the move from years of accumulating assets to the process of withdrawing those assets to fund your retirement.  It’s a huge shift and one which you should plan for in your final year or two of work.  Recognize that the skill set needed to manage withdrawals from your portfolio is entirely different than those you’ve honed during your accumulation years.  Start developing the skills required to pull from your investments now.  Recognize they’re important skills that you’ll be using for the rest of your life.

Also, the asset allocation you’ve maintained during your working years is likely different than the allocation you’ll need in your retirement years.  For example, to avoid Sequence of Return risk, you’ll want to have your cash cushion fully in place by the day you retire.  It takes some time to reposition your portfolio, so figure out your strategy and get it implemented in your last year or two of work.

5. What’s Your Risk Tolerance?

Let’s face it, there’s risk associated with the decision to retire.  By definition, you are making a decision without knowing all of the answers.  The future is unknowable. All things being equal, a decision to retire earlier has more risk than a decision to retire later. Are you aware of, and comfortable with, those risks?

Understanding and becoming comfortable with how much risk you’re willing to tolerate is a part of every decision to retire, whether people realize it or not.  Are you comfortable relying on private insurance for a few years before your Medicare kicks in?  How concerned are you about the risks of long-term care, and what are you going to do about it? Are you concerned that your investments won’t keep up with inflation?  How much of your assets should you allocate to stocks vs. bonds vs. cash?  

Many people think “risk tolerance” is primarily used to determine asset allocation, but I’d argue there are a lot of risk factors that need to be considered as you’re finalizing your decision to retire.  For example, there’s risk that you’ll lose some great years of retirement if you delay your decision.  If you’re unhealthy, that risk increases.  How comfortable are you in giving up those “good years” of retirement?  That’s a risk tolerance question, and exactly the type of thing you should be thinking about as you finalize your decision.

decision to retire blog title

The Least Important Factor In Your Decision To Retire

As you read through the list of important factors, you’ll notice one that’s intentionally missing.  And yet, this factor is the one that many people think of first.  Perhaps that’s because we’ve been conditioned throughout life to think of this factor when facing many of life’s milestones:

  • At what age do you start school?
  • When are you allowed to start driving?
  • At what age can you vote?
  • When can you legally drink?
Many people consider this factor one of the most important in their decision to retire. I'd argue it's essentially irrelevant. Click To Tweet

By now, you’ve figured out that I consider “Age” to be the least important factor in your decision to retire.  For once in your life, age has nothing to do with this decision.  Unlike driving, voting, and drinking, there are no legal constraints on when you can choose to retire.  As long as you can check the boxes on the important factors listed earlier, you can choose to retire regardless of your age.

I know folks who have retired at age 35, and I know folks who are still working at age 70.

“But wait,” you argue, “what about Social Security?”

My response:  You’ve got that covered in #1 above (Do You Have Enough Money).  The age at which you decide to claim Social Security is, in reality, a math equation.  If you’ve done the math and know you have enough money to retire at age 55, you know you’ll be fine pulling from your portfolio until your Social Security benefits start.  If you don’t have enough money and have to wait until a certain age to ensure your SS benefits are flowing to meet your expenses, that’s fine.  But don’t attribute that to age.  It’s a “money problem,” not an age issue.

“But what about Medicare?”

My response:  Again, if you’ve done your homework on #3 (Realistic Spending Estimate), you’ll know if you’re able to afford private health insurance until your Medicare kicks in at age 65.  Thanks to the Affordable Care Act, you can take some comfort in knowing private insurance plans will, in almost all situations, be an option for you.  Sure, there’s always some risk (#5 above, Risk Tolerance), but is it worth working those extra years “just” to get health insurance from your employer?  

I’d argue that many of the factors that folks attribute to age are, in fact, covered by the 5 most important factors listed above.  But hey, I love a good debate.  If you disagree, let’s chat in the comments.


If you’re making your decision to retire, I encourage you to work through the 5 factors outlined above.  Don’t just assume you have to work until a certain age to achieve a certain benefit.  In reality, age isn’t the factor that really matters when you’re making your decision. 

If you can check the box on the top 5 factors outlined above, I’d argue you’re ready to retire.

Regardless of your age.

Your Turn:  What do you think?  Is there another factor that you’d include in my list of the most important factors?  Is age more important than I’m giving it credit for?  Let’s chat in the comments…


  1. I believe there is another factor; have you had enough of work. You will know it when the stress and office politics is unbearable. I loved my job, was compensated well, on top of the competence ladder. But couldn’t take the “wokeness” and sheep mentality any longer at a very, very large corporation. Glad to not wake up at 4 am , running a large manufacturing plant. Don’t miss the commute. But especially don’t miss the politics that distracted from the mission of the job.

    1. Bob is spot on, I like to think of it in 3 simple aspects, which is mostly stated with a lot more words in the original post by Fritz:
      – do you have enough?
      – had you had enough?
      – do you have enough else to do?
      Answer all three, time to go! 2 out of 3, do some more homework or make some changes.

      1. Great points! I feel the same way about work. I love what I do but get extremely frustrated and stressed at leadership direction that cannot be supported while they sit in their tower. I love working with teams to accomplish goals, but more and more the resources are constrained. Makes for a tough slog.

    2. I couldn’t agree more. I grew to hate a job I once loved. I tried switching teams, different jobs in the company but career was going nowhere. Short of going back to school and switching careers, i had just had enough. Its only been 4 months since retirement but so far I don’t regret leaving at all.

    3. Bob, an excellent addition to the discussion. I would have added that as #6, though I do think the “Running To Something” (#2) is more important than “Running From Something.” That said, being tired of the corporate crap is a strong motivator for many, and it was a factor in my decision as well. I’m happy beyond words to have “escaped” before all the woke mentality contaminated the corporate world. Thanks for the great addition.

    4. A friend of mine considering retirement (from the government) at the same time as me said “it’s just not fun anymore”. I looked at my life and work (partner in a mid-size law firm) and said that’s me and submitted my resignation notice. (Of course I had been thinking about the other factors too. I could have dilly dallied for years, but this pushed me to take action.

  2. Hi Fritz – Great post!

    Once you have all of the finances mapped out, to me it all comes back to #2. I’m not quite FI yet, but actually figuring out a purpose in retirement seems to be among the most difficult parts.

    That’s exactly why I started a blog, wrote a book, (had a very brief foray into YouTube…), etc. I wanted to test out the different possibilities of what I could spend time in in “retirement.”

    Curious, since you’ve decided to post less frequently (which I’m sad about but understand completely), what types of things do you fill your time with now?


    1. “…actually figuring out a purpose in retirement seems to be among the most difficult parts.”

      Your a wise man, Marc. Glad to see you focusing on the Purpose side of the equation before you actually hit FI.

      As for what I do to fill my time, I could write an entire post (oh wait, I did…How I Spend My Time In Retirement). As a quick update to that post, in the last few weeks I’ve…

      – Hiked a few days on the Appalachian Trail
      – Mountain Biked in Tennessee
      – Organized a Volunteer Appreciation Party with my wife for FFF
      – Created graphics and an Eventbrite listing for our upcoming FFF fundraiser
      – Gone out with friends several times
      – Painted our spare bedroom
      – Finished remodeling our guest bathroom

      And more… No problem finding things to do that fill my time in retirement!

  3. Another fine pebble young man! Fritz, IMHO, I would suggest to all who are aspiring to retire earlier than 65…that they have sufficient cash flow for all their non-discretionary spending needs met by their income, without factoring in SS future payments. Then when they hit 65 or 70 (after SS starts), they will have abundant cash flow to travel, give, etc. for the rest of their lives….without touching their investments at all. We have accomplished this….and will allow our portfolio to grow and be able to give generously to those we see in need. I like our plan very much – that sounds conceited! 🙁 We are able to live now at age 63 without any SS coming in and not withdrawing even 2%. The future is bright. Grateful to God for His many blessings.

    Readers – please give LOTS of thought to what purpose you will pursue to fill your time once you stop punching your time card. Most crucial. Lots of charities to donate your time and treasures to. Freedom for Fido is one of many.

    God’s blessings to all of you. Retired Navy squid.

    1. To reiterate:

      “Readers – please give LOTS of thought to what purpose you will pursue to fill your time…”

      Steven is one who’s been there, and is doing it right. We can all learn from the wisdom of his experience. Thanks for being a loyal follower, much appreciated.

  4. You should also consider the question of how is your health? Do you really want to enter retirement old and feeble? My job was eliminated when covid hit in 2020 and I was 64. I decided to retire. My weight and blood pressure were rising due to constant stress. I could have been setting up for a stroke or heart attack like my parents. I did a deep dive in studying health… there is plenty on the internet. PS. Don’t blindly listen to your doctor. Anyway, I dropped 25 pounds, lowered my blood pressure, improved my fitness running and lifting weights and am in better shape in 15 years. Yes you can reverse aging if you don’t wait to late. I have plenty of energy to travel and help my children and grandchildren. I have gone through a second Renaissance. It has been a real blessing to me and them. On the other hand, I see in-laws who are older and unhealthy and are very limited in their activities. So take charge of your health before it gets away.

    1. Don, thanks for your transparency on the importance of health in the decision. I touched on it in #5 (Risk), but yours is a great example of why it’s an important factor. Contrats on shedding those 25 pounds and focusing on getting in shape. It’s one of the things I love most about retirement. Heading to Spin shortly, as a matter of fact…

      Best of luck with your “second Rensissance,” thanks for a great addition to the discussion.

  5. Great post, Fritz! You netted it out well and pointed us to your other related posts. This is one I will refer to my wife to help bring her up to speed. We have many of the pieces you mention assessed, but have not talked about the purpose and how we will spend our retirement.
    The one thing I am struggling with is #4. There are as many opinions as there are advisors. I am closer to 3 years cash and just need to consolidate our mess of funds and investment providers. I like the idea of a CFP but then lose ~1% that I could use for our income.
    Thank you for continuing to share your experience and wisdom with your readers.

  6. Fritz – With one week to go before retirement, I feel really good about all 5 of those factors, and I echo a lot of the comments above from other readers. Thanks for the timely post!

  7. Thoughtful post Fritz, great points as usual. I always enjoy reading your comments. I couldn’t agree more that age is the least important consideration in deciding when to pull the plug on your career and start enjoying your retirement. Covering your 5 points in pre-retirement planning is much more important than how old you are when you start the final chapter of your life. If you have covered all your bases through a lifetime of planning, then beginning retirement at whatever age you happen to be is the start of a very exciting time of your life. To experience the freedom of time is a thrill like no other.
    I always expected to work until I was at least 65, possibly working to 70 at the outside. Now I’m about to turn 65, and I have been retired for 10 years. I never expected things to work out as they, but then that is one of the things that makes life exciting, you never really know what is going to happen. My wife and I have had an amazing 10 years so far in retirement, and that was 10 years we never expected to have after her cancer diagnosis in November of 2012.
    Retirement for use came very unexpectedly, but we thought it was important to seize the moment. Time, as we see it, is our most precious asset. Being able to retire on the spur of the moment was only financially possible because we had made a million baby steps towards financial independence. I learned very early in my life that life is a knuckle ball, and it’s coming right at you so you better plan ahead the best you can.
    Thank you for all you do Fritz, God bless you and your family and enjoy your retirement!

    1. 31 – I love the knuckle ball analogy. Spot on. Your story of retiring earlier than planned is a good reminder of why it’s always better to be ready early (even if you think you’ll be working forever), than find yourself unprepared when an unplanned retirement is sprung on you. Thanks for your loyal following and engagement with my blog, much appreciated.

  8. If not the best article you have ever done, it certainly is in the top 5. I always enjoy your writings, you are appreciated, keep up the good work.

  9. There are two types of personalities that should not plan to retire before the age of 40…
    1. Extrovert
    2. Type A

    For the rest of the population as Fritz said…” 1. Do You Have Enough Money?”

  10. Great article. I would also agree that tolerance for the new world of corporate America & health should be top considerations, but taking those million baby steps along the way, makes your list still rise to the top. If you haven’t taken those steps along your path, you will just have to tolerate the other two.

    1. Another brilliant article,Hello from the UK I traveled extensively with my job as a service Engineer the far East, USA South Africa etc etc but was always going to retire early so planned it to the nth degree whilst st the same time avidly reading yours and other articles so well done.
      I was gradually reducing my working Days ( a form of mini retirement) for a couple of Years before I was Furloughed from work in the first covid lockdown in England, I decided now is the time and haven’t looked back since. JUST DO IT.
      ps I was sent to Atlanta Four Years ago for a Week with work, I liked it so much myself and my Wife came back for a Holiday, Taking in New Orleans, the Blues Highway, Memphis Nashville and finally a Week in Blue Ridge. It’s a small world

  11. Everyone’s different but for me the mental part is the hardest. It’s not the identity with my occupation, although there is some of that. It’s more the “I can’t believe I’m voluntarily leaving a job where I get paid really well. How many people would give their left arm to have my job?” And also the fear of starting to have to spend my savings, although I’m trying to avoid that by building my business up enough to live off it. Great post!

    1. I experienced the same feelings and read about the “one more year” syndrome. The way I rationalized was- I am 66 years old, in good physical shape; how many more years do I have that I can enjoy traveling or just “doing” before my body can’t handle it. At 66, not too many. If you have the money and close to social security/ and can get health insurance from your company or medicare, you will not miss work when you retire. All the “friends” you had become ghosts. Your blood pressure will go down. Unless you work in a stress free environment with no politics and enjoy the work and people then forget my advice. Otherwise ponder on my points of view. You will know when it is time.

  12. I had been contemplating retirement and the factors you set out. I could have dilly dallied for ages. A friend in the same situation said “it’s just not fun anymore”. I thought about that and realised it was true. I resigned as a partner in a mid-size law firm shortly thereafter.

  13. A very thought provoking post. Is/was there any feeling of guilt about leaving associates in a work situation that you are departing? Any remorse about abandoning people who have struggled along side you while building an organization?

Comments are closed.