Choosing a retirement date is an exciting time. Not only does it mean you no longer have to bust your hump at a nine-to-five for years on end, but it also signifies your transition into the next phase of your life–potentially the best phase of your life.

Historically, 65 has been the age used as a benchmark for retirement. But with longer life spans and longer retirements, you may decide you want to work as long as possible. For those with more physically demanding jobs or more financial flexibility, you may be on the other end of the spectrum and looking to retire as soon as possible. That’s where financial planning services can help you take a more strategic approach. The right plan can align your lifestyle goals with your financial reality.

It’s also wise to work with experienced wealth planners who can tailor retirement strategies based on your situation, including healthcare planning, income streams, and legacy goals.

So, how do you decide when you should retire?

Short answer: Choosing a retirement date means weighing your savings, retirement income, health care coverage, Social Security claiming age, taxes, employer benefits, and lifestyle readiness. The best time to retire is not just a specific age—it’s the point when your financial plan and personal goals are aligned.

Retirement Date Checklist

While we can’t give you one specific retirement age, we can recommend you ask yourself these key questions before putting a retirement date on the calendar.

1. Have I Saved Enough for Retirement?

This is probably the most important question you should be asking yourself before retiring. After all, a successful retirement largely hinges on the ability to financially provide for all your goals. But how can you really know how much you’ll need? A general guideline to calculate how much you need is to multiply your desired annual income in retirement by 25. Basically, that means you’re planning for a 25-year-long retirement.

For example, if you and your spouse plan on doing nothing but relaxing and focusing on your hobbies (and playing the occasional round of golf), then maybe you two can get by on something like $40,000 per year. Using our “rule of 25,” that means you should have about $1 million saved up across your various accounts to last you through your retirement.

But what if you’re dreaming of doing some serious traveling? What if you two decide you want to buy or rent a second place of residence? If that’s the case, you’ll need to increase your annual income estimates, which will greatly increase how much you should have saved up. Even increasing your estimated annual income by just $5,000 will boost the total amount you’ll need to have saved for retirement by $125,000.

While the 25x benchmark isn’t written in stone, and the amount you’ll spend each year for lifestyle and health care expenses is sure to fluctuate, these are still good things to keep in mind when determining if you’ve saved enough.

You’ll also want to think through your retirement income withdrawal plan. How will you replace your paycheck? Which accounts will you draw from first? How will market volatility, inflation, and sequence-of-returns risk affect your portfolio in the first few years of retirement?

2. What’s My Plan for Health Care Coverage Beyond Medicare?

One of the most overlooked aspects of retirement planning is health care. No one wants to think that they’ll have health problems, but the reality is that you’ll likely need to plan for medical costs–both as you retire and later on down the road.

If you retire after age 65, while you’ll still likely have additional medical expenses, Medicare will provide a strong foundation for your health insurance needs. But if you retire prior to age 65, you’ll need to think about where you’ll get your health insurance if your employer doesn’t offer retiree medical insurance. COBRA or a private policy can help fill in the gaps, but both can be pricey.

Retiring before Medicare eligibility may require a health care bridge strategy. This could include COBRA, an Affordable Care Act marketplace plan, coverage through a spouse’s employer, retiree medical coverage, or private insurance. You’ll also want to account for premiums, deductibles, prescription drug costs, dental and vision coverage, and out-of-pocket expenses.

Besides paying for basic medical coverage and health insurance, it’s also a wise move to plan for long-term care (LTC). Medical advances are allowing people to live longer, but the older you get, the more likely it is that you’ll need LTC. The need for extended LTC can quickly deplete your assets and their ability to generate income. However, having a fine-tuned financial plan that includes a strategy to pay for LTC can prepare you for a life-changing event.

3. Have I Thought About My Social Security Claiming Age?

If you haven’t thought much about Social Security when planning for retirement, now’s the time to start. Not only is it a benefit afforded to just about every American, but it may also end up being a significant part of your retirement. According to the Social Security Administration (SSA), in 2020, Social Security benefits represented about 33% of income for those age 65 and older.

Retiring earlier may mean you’ll have to claim your benefits earlier, leading to a permanently reduced benefit. On the other hand, working longer can provide the flexibility to delay receiving your benefits, allowing them to grow until you reach age 70–at which point you can permanently receive more than 100% of your benefit. While on the surface it may seem like the more prudent idea to wait to claim Social Security, your own situation will dictate how and when you should start receiving your benefits.

Additionally, you’ll want to pay attention to the annual cost of living adjustment (COLA), as it can increase how much you receive from your Social Security benefits.

4. How Can My Retirement Date Affect Taxes?

Your retirement date can have a meaningful impact on taxes. Retiring near year-end versus early in the year may affect your taxable income, bonus timing, capital gains planning, Roth conversion opportunities, and Medicare income-related monthly adjustment amount exposure.

You may also need to plan for required minimum distributions (RMDs). In general, RMDs must begin from many tax-deferred retirement accounts when you reach age 73.

A thoughtful retirement date can create planning opportunities. For instance, if your taxable income drops after you retire, you may have a window to consider Roth conversions, manage capital gains, or adjust withdrawal timing before RMDs begin.]

5. What Employer Benefits Should I Review Before Retiring?

Before choosing a retirement date, review how your employer benefits are affected by timing. Some benefits may depend on whether you retire before or after a specific date, anniversary, quarter-end, or year-end.

Key items to review include:

• Annual bonuses or commissions
• Unused paid time off
• Pension credits or service milestones
• Stock options, restricted stock units, or other equity compensation
• Health Savings Account or Flexible Spending Account rules
• Employer health coverage and COBRA eligibility
• Retiree medical or life insurance benefits

For business owners or executives, your retirement date may also need to coordinate with succession planning, liquidity events, deferred compensation, or the sale of a business.

6. Should You Retire at the Beginning or End of the Year?

There is no universally “best month to retire,” but the time of year can matter. Retiring at the end of the year may allow you to collect a final bonus, use employer benefits longer, or simplify tax-year planning. Retiring early in the year may help reduce earned income for that tax year and create more flexibility for retirement income planning.

The best time of year to retire for tax purposes depends on your income sources, benefit rules, investment plan, and cash flow needs. Before selecting a final retirement date, coordinate your timing with your financial advisor, tax professional, and human resources team.

7. How Does My Partner Feel About Me Retiring?

Do you and your significant other have the same retirement goals? If you haven’t had that conversation yet, it’s important to take the time to see if your retirement plans are aligned. Does your spouse want to have more free time to pursue a favorite hobby? Is working as long as possible your partner’s primary goal? Does your partner find more value in spending time with friends and family or greater financial security from a delayed retirement?

This conversation should also include emotional readiness and lifestyle planning. How will you spend your time? Will you retire at the same time or stagger your retirement dates? What will your daily routine look like? How will you balance travel, family, hobbies, volunteering, or part-time work?

Choosing when to retire isn’t so much about a specific age as it is reaching the pre-retirement goals you and your significant other have set. The feeling of satisfaction that comes from having reached your goals is the best indication that you’re ready for retirement. And if you have any questions or concerns, reach out to your financial advisor for help laying out your retirement roadmap.

What to Do 12 Months Before Your Retirement Date

Use the year before retirement to pressure-test your plan and avoid last-minute surprises.

• Confirm your retirement income sources and withdrawal strategy.
• Review Social Security claiming options.
• Estimate health care and long-term care costs.
• Review Medicare timing if you’re approaching age 65.
• Ask HR about bonuses, unused PTO, pension credits, stock compensation, and COBRA.
• Review your tax plan, including Roth conversions, capital gains, and RMD timing.
• Update beneficiaries, estate planning documents, and insurance coverage.
• Build a cash reserve for the transition from paycheck to portfolio income.

FAQs About Choosing a Retirement Date

1. How do I choose a retirement date?

Choose a retirement date by reviewing your savings, retirement income, health care coverage, Social Security timing, tax situation, employer benefits, and lifestyle readiness.

2. What is the best age to retire?

There is no single best retirement age. The right age depends on your financial readiness, health, career goals, family needs, and desired lifestyle.

3. Is it better to retire at the beginning or end of the year?

It depends. Retiring at year-end may help with bonuses and benefits, while retiring early in the year may create tax and income-planning flexibility.

4. Should I retire before Medicare starts?

You can retire before Medicare starts, but you’ll need a plan for health insurance coverage until Medicare eligibility, which generally begins at age 65.

5. How does my retirement date affect Social Security?

Your retirement date may affect when you claim Social Security. Claiming earlier can reduce benefits, while delaying benefits can increase monthly payments up to age 70.

6. How does my retirement date affect taxes?

Your retirement date can affect taxable income, withdrawal timing, Roth conversion opportunities, capital gains planning, RMD timing, and Medicare premium exposure.

7. What should I do one year before retirement?

Review income sources, health care coverage, Social Security timing, taxes, employer benefits, estate documents, and your retirement withdrawal strategy.

8. Should my spouse and I retire at the same time?

Not necessarily. Some couples retire together, while others stagger retirement dates to preserve income, benefits, or lifestyle flexibility.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

This article originally appeared on April 19, 2015 in the St. Paul Pioneer Press.

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