How to Know if You’re Ready to Retire

Estimate your benefit.

You can estimate your UCRP pension benefit using the UC Retirement Estimator tool on At Your Service Online.

About three months before your retirement date, call the UC Retirement Administration Service Center (RASC) at 1-800-888-8267 to request your Personal Retirement Profile (PRP).

If you are a UCLA employee, contact your local benefits office.

When will you be ready to retire?

Particularly if retirement is still far away, you’re probably thinking in terms of dollars—how many you will have and how long they will last. But new research finds that for many people the decision to retire is not just about money. It’s about life and the freedom to enjoy it.

While financial and work-related factors are the primary reasons people continue to work, with eligibility for Medicare and Social Security as key concerns, a recent survey* found that it’s often non-financial factors like family, health, and lifestyle that ultimately cause people to decide to retire. Among retirees, 72% chose leisure as a very or somewhat strong reason to retire, 64% pointed to stress at work, and 62% cited a desire to spend more time with their grandchildren.

If you’re looking forward to the freedom that retirement brings, here’s a checklist of things that can help you prepare, both financially and emotionally, for the shift.

Define your expectations

Five years before you plan to retire may be a good time to start thinking through the details and prioritizing your goals. This is the time to decide when you’ll retire as well as the kind of lifestyle you want after retirement. Be as accurate and realistic as you can, discuss your plans with your partner, if you have one, and continue to review and refine your expectations as you approach retirement. Make sure you consider the following:

  • What you want to do. Take the time now to imagine your lifestyle in retirement. Think about what is important to you, and how you want to spend your time. Maybe it’s traveling, or fishing, or even skydiving. Maybe it’s starting a new business, consulting, mentoring others, or volunteering. Or maybe it’s spending more time with your partner or your kids and grandkids. Make a list of special things you want to do and places you want to visit during your first five years of retirement. You may also want to set a daily routine for retirement that includes activities and people you enjoy. When you’re ready, try filling out a one-month retirement calendar to make your priorities tangible.
  • Where you plan to live. Make a top-three list of places you’d like to live. If you want to move, make sure you also consider how that will affect your cost of living, access to health care, and, if you have your eyes on another state, your tax obligations. If you plan to stay put, you'll want to consider how your home equity factors into your plans.
  • How you’ll manage your health. Review the health care benefits you may qualify for in retirement. Eligible retirees can continue UC health and welfare benefits in retirement. Medicare benefits begin at age 65, and, if you have a health savings account, it can help you save and pay for health care costs in retirement. Perhaps most important, work now to improve your health and manage your stress. Know the causes of stress in your life and develop coping strategies. When the stress of work clearly begins to negatively affect your health, it may be time to accelerate your transition to retirement.

Give your investments a checkup

As you round the bend toward retirement, you may not want to take on any more investment risk than necessary. But the consequences of being too conservative can be just as worrisome when you account for inflation and the possibility that you could outlive your savings. Part of the solution is an appropriate asset mix and understanding your objectives.

Although you can’t control market behavior, you can help minimize its long-term effect by selecting an age-appropriate investment mix. Remember that you may live 30 years or more in retirement. So while retirement is often the time to take some risk off the table, make sure you’re not tempted to become too conservative.

Rev up your retirement savings

The economy and lack of confidence that pre-retirees could make their money last throughout their retirement are two of the most important financial factors that keep them working*. If these reasons resonate with you, consider the following steps to help boost your retirement readiness:

  • Try to turn any extra money—bonuses, raises, or reduced expenses—into savings. 
  • Max out on the tax advantages of the UC 403(b) and 457(b). If you’re over 50, you can contribute up to $24,000 to each plan in 2016, for a total of $48,000. You may also be able to take advantage of special and lifetime catch-up contributions available through the UC plans. Call 1-866-682-7787 to learn more about these catch-up features.
  • Reduce and ultimately eliminate any high interest rate debt. 
  • Invest appropriately for your age, risk tolerance, and goals—either on your own or consider meeting with a Retirement Planner.

Map out the rest of your working life

  • Think about how much longer you really want to work. If you’re looking for more freedom now, ask about part-time or flexible work options.
  • If your location offers a mentoring program and your work schedule permits, consider sharing your skills and wisdom with colleagues and/or students.
  • Finally, before you retire, start exploring volunteer opportunities that leverage your skill set, talents, and interests. The information you gather can help you hone in on the ways you want to spend your time when you do decide to retire.

 


* Fidelity Investments Decision to Retire study, August 2015. This study represents insights from a series of in-depth interviews conducted in Boston, Chicago, and San Francisco (April 2015), and from an online survey of more than 12,000 defined contribution plan participants recordkept by Fidelity, ranging in age from 55 to 80 across all industries and income levels, who felt they had some control over their decision to retire. The research was completed in August 2015 by Greenwald & Associates, Inc., an independent third-party research firm. Fidelity also worked in collaboration with the Stanford Center on Longevity on the study.

Guidance provided is educational.

Fidelity Brokerage Services LLC, member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
© 2017 FMR LLC. All rights reserved.

748768.2.1

Learn more