Is There a Best Day of the Year To Retire? Experts Explain
By Angela Mae,
2024-08-25
Nuthawut Somsuk / Getty Images
Choosing when to retire is one of the biggest decisions you’re going to make. And while retiring at certain times of the year might be more advantageous than others, it’s ultimately a very personal decision you should make when the time feels right — and you’re financially prepared.
When it comes to retirement, the day of the week might not be as important as the time of the year.
“While there’s no one-size-fits-all answer, retiring at the end of the year can be beneficial for a few reasons,” said Tyler Meyer, CFP, founder of Retire to Abundance . “First, you may be able to maximize your annual benefits, such as bonuses or employer contributions to retirement plans. Also, by retiring at the end of the year, you can better plan your taxes, as you’ll have a clearer picture of your total annual income and can potentially delay taking distributions from retirement accounts until the following year.”
If you don’t want to wait until the year’s end, another good time to retire is during the warmer seasons.
“Spring and early summer are often considered ideal times to retire,” Meyer said. “The weather is generally better, making the transition into retirement more enjoyable.”
On the other hand, some retirees may prefer to wait until the winter if their goal is to keep earning money right up until they can go out and enjoy winter or holiday-related activities. The first day of winter this year is December 21.
Midyear Has Its Advantages Too
But for some people, retiring in the middle of the year comes with tax benefits that are hard to ignore. In this case, it might be better to choose whatever day falls right in the middle — perhaps around June 1.
“Retiring midyear allows you to spread your income over two tax years, which can help manage tax brackets and possibly reduce your overall tax liability,” Meyer said.
A Significant Personal Date May Be Best for You
Much like wedding dates and other major life events, sometimes the best day of the year to retire is simply a date that holds personal meaning for you.
“I don’t think there is a specific day of the year that is better to retire,” said Michael Collins, CFA, founder and CEO of WinCap Financial . “Some people may choose to retire on their birthday or on a significant date, but ultimately the timing should be determined by one’s own circumstances and goals.”
Retire When You’re Financially Ready
Many experts agree that there’s not really a best day to retire — or even a best month or season. It’s more about choosing a date that aligns with your financial preparedness, wants and needs.
“Instead of focusing solely on a specific day or month, the best time to retire is when you’ve thoroughly assessed your financial readiness and emotional preparedness,” Meyer said. “Consider factors like your health, your spouse’s retirement timeline and any major life events on the horizon. Retire when you feel confident that you’ve built a sustainable financial plan that will support your desired lifestyle.”
Ask Yourself What Retirement Means to You
For some people, retirement means leaving behind the workforce for good and achieving ultimate financial freedom. For others, it’s a bit more nuanced than that. You’ll want to find out what retirement means to you before making any major decisions.
“What does retirement mean? Is it simply reaching a point where you have the financial ability to retire, or do you feel forced to just retire from public and work life? There’s going to be a very subjective answer to this question,” said John Gillet, a financial planning expert and the CEO and founder of Gillet Agency .
“Everyone is different,” Gillet said. “Speaking for myself and a few of my clients, there seems to be a need to continue to have a purpose. And for some, that means working in a field they love and having a sense of contribution.”
It’s Ultimately Up to You
Choosing when to retire is ultimately up to you and how prepared you are for this next big step in life. For some, the tax advantages of retiring midyear or at the end of the year can be major factors in their decision. For others, it’s more about choosing a personally meaningful date — whether that’s a Sunday or a Thursday.
“My advice for choosing the best time to retire would be to carefully evaluate your financial situation and personal readiness,” Collins said. “Consider factors such as your age, savings, health status and future plans before making a decision.”
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