6 Reasons Not To Retire in the Summer (And When’s the Best Time of Year To Do It)

If you're ready to ride off into the sunset of retirement , it can be tempting to leave your job when the summer sun is shining. While everyone’s situation is different, there are some strong reasons to stay at your job until summer’s golden glow fades away.

We explore some of the reasons why retiring in the summer might not be the right move and when might be a better time to leave the working world.

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1. May miss year-end bonus or profit-sharing payout

If your company offers year-end bonuses, you’re likely to miss out on that potential windfall if you throw in the towel halfway through the year. The same concept holds true for profit-sharing payouts, which often happen toward the end of the year.

For many retirees, passing up an opportunity for an influx of cash is less than ideal.

If you're eyeing retirement, take a minute to consider your company’s bonus schedule. It might be worth waiting around to accept a helpful check before heading for the door.

Do you owe the IRS over $10K? Ask this company to help you eliminate your late tax debt.

2. Tax bracket may change for half the year

If you leave your job halfway through the year, it will likely impact your tax bracket. Before leaving your employer, take some time to see how your tax situation is impacted.

For some, leaving means a drop in your income for the year and a lower tax bill. But if you're taking retirement benefits, accepting commissions, receiving compensation for unpaid vacation leave, or increasing your income through a consultant position, a rising income could bump you into the next tax bracket.

Depending on the changes to your income, you might decide to stick it out until the end of the year. But it’s a good idea to run the numbers on your own or with an accountant before moving forward.

3. Your retirement benefits could change

If you are on track to receive a pension, the number of years you’ve served the company makes a difference. With some pension plans, working a single day into the next year will increase your years of service, which in turn could increase your pension benefits.

It’s worth checking into the details to see if staying with your company for a few more months could boost your retirement benefits.

4. Stocks can change seasonally

While it’s impossible to predict the future of the stock market, it is possible to look at past trends. In the past, the stock market has had a lower performance between May to October compared with the rest of the year.

If you plan on selling shares of your stock holding to cover your retirement expenses, leaving in the middle of the summer may not be an ideal time to sell.

For retirees who can stick it out until the fall, you might see a stronger market when you go to sell your stocks.

5. Wait until you're fully vested

Many companies offer vesting plans, which means that the funds your employer contributes to your retirement accounts aren’t fully yours until you meet particular service requirements. Even missing the mark by a month or two could mean you are leaving money on the table.

Take the time to review the details of your employer’s vesting policy before saying goodbye. If you need to hit a vesting milestone to have full access to your employer’s retirement contributions, it’s usually a good idea to wait it out.

6. Make sure your health care is solid

Paying for health care is often a large part of your retirement plans. While most qualify for Medicare at age 65, those who want to retire early will need to cover their health plan costs another way.

Some early retirees rely on COBRA, but COBRA coverage usually has a time limit. With that, you’ll need to confirm you have this coverage until you are eligible for Medicare or seek out another solution for your health care needs.

For example, you might shop for policy on Healthcare.gov. Get your health care needs in place before retiring in order to build this cost into your retirement planning budget.

Bottom line

Retiring is a major decision for many reasons, including your financial situation.

If you want to enjoy a stress-free retirement , it's helpful to consider all of the factors involved . Depending on your situation, you might decide to wait a few extra months before retiring.

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