12 signs you can retire now (or you need to wait)

Not sure you can retire?  Well, maybe this short list that I was thinking about the other day might help you out. Here are my signs you can probably retire, now, or you need to wait.

  1. Your investment income from your portfolio exceeds your expenses, and then some.
  2. You have no debt entering retirement or you could easily pay off debt before retirement if you really wanted to.
  3. You don’t worry about a 30% stock market decline that could negatively impact your portfolio.
  4. You don’t worry about interest rates or bond yields anymore.
  5. You couldn’t care less about prolonged bear markets and what it does to your portfolio.
  6. You don’t tinker with your portfolio.
  7. You have a juicy workplace defined benefit pension plan with at least 30 years in the bank.
  8. You don’t care about house prices; there is no need to finance your retirement by selling your home.
  9. You’ve done the math and you already know you can (retire) based on a 3% safe withdrawal rate from your portfolio.
  10. You’re not relying on Canada Pension Plan (CPP) or Old Age Security (OAS) to cover expenses, income from these programs is considered retirement “fun money”.
  11. Most of the above.
  12. All of the above – what the heck are you waiting for???

The keys from this list for us are #1 and #2.  Once our projected cash flow from investments exceeds our expenses AND all debt is gone, we’ll consider part-time work or maybe even calling it a day from the workforce.  Until then, we save, we invest and we have some fun with what’s leftover.

How do you know you can retire (or you need to wait)?  What items would you add to my list?

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

28 Responses to "12 signs you can retire now (or you need to wait)"

  1. I meant to include with so many people and governments depending on unusually low rates of today a significant interest rate rise (even to more normal) could negatively affect the economy overall . Corporate, personal, government debt costs would rise and taxes almost certainly too. Worry, maybe not, but consider, yes. Diversify, yes.

  2. A good read for anyone considering the financial part of retiring.

    Lloyd, I think I was reading your mind as I read through the list. I agree with what you said.
    I would add that #4 might also fit into what you said about #5. High interest rates likely means high inflation and that could wreak havoc for investors relying on dividends, some holders of bonds or others without any or full inflation protection on their pension or other income source.
    As well I would add that people planning retirement should understand what their retirement expenses will truly be first, since this list focuses primarily on income. ie What are your fixed expenses (needs) and what are your discretionary expenses (wants), and what are the wild cards(health care etc) Build a sustainable cash flow plan that keeps you safe and ideally very comfortable.

    1. I think it’s very important to establish a financial baseline, re: know what your expenses are as you enter/consider retirement. Just like the business world it’s very difficult to manage what you don’t measure.

      “Build a sustainable cash flow plan that keeps you safe and ideally very comfortable.” – I’m doing my best to do so 🙂

  3. 1. – Check – If by Portfolio you are referring to my Defined Benefit Pension which is managed by my DBP Advisors.
    2. – Check
    3. – Check – My DBP fund was reduced by $3 Billion during the Great Recession and I didn’t lose a single nights sleep.
    4. – Hmmm…worry? I have a maxed out TFSA in a MIC fund which relies on Interest rates. This is for my 2 Children’s inheritance and I would be happier with higher rates. But, no, I’m not worried.
    5. – Check – see #3.
    6. – Check – Can’t 🙂
    7. – Check – DBP with 31yrs – 62% of avg best 5yrs gross. No guaranteed COLA.
    8. – Check – Been renting in Victoria, BC for 21 yrs. Investing the savings.
    9. – Check – On my 3rd yr. Wintering in New Zealand. Sublet my apartment in Victoria for 3 months to Easterners. Motorcycling all around NZ. 1NZD = 0.90CAD 🙂
    10. – Fail – Need the CPP+OAS to supplement DBP @ 65+ to cover loss of Bridge payment. Not claiming until 65. Using up RRSP’s first. Relying on CPP & OAS COLA increases.
    11. – Check.
    12. – See #9

    1. Thanks for your comments Lawrence. Based on what I’ve read, re: DBP with 31yrs; many “checks”, including the all important #9 which is the 3% SWR, you are likely set. Well done and congrats.

  4. Great post Mark. Don’t forget though, retirement is not all financial, there is a HUGE psychological aspect of it. Do you have hobbies/activities to fill your day? Do you have something that brings you purpose? While the idea of quitting work can be quite appealing to some, the real question is “now that I don’t need to work for money, what’s next?”

    1. Great point MDJ. Good to hear from you. I/we have plans to travel (need money for that), volunteer, part-time work potentially in the financial sector, run a small business (blog, other), I’d like to learn how to do my own home renos, I have sports hobbies and more – health permitting. As I get older, I’m learning that this “retirement” thing for me/us is really not a destination, more of a state of mind – how to work on our own terms – and do whatever we want with the time leftover. I hope that stage is less than 10 years away, so I’ll be right behind you. 🙂

  5. Great 12-Point list Mark that sure makes us dream about retiring soon!

    Are you starting to copy my 12-Minute approach? You can spread the word, I don’t mind… 😉

    More seriously…About #9, I think 3% is really safe; it could be a notch or two higher.

    1. 12 is a good number. I feel a 3% SWR is very safe (better than 4%) given bond yields are not what they used to be and from all the articles I’ve read by actuaries, they predict equity returns will be lower going forward for the foreseeable future.

  6. #1 to #6 are all Yes. No Company benefits.
    Market has already dropped considerably, but not to the point where it is below my investment. Should it continue I would not worry unless companies begin to cut dividends. Even then it would take 4 or 5 of my 19 before I’d be concerned.

    1. I’ve got just under 15 years into a DB pension although this pension is not gold-plated. Regardless, I am very happy I have it. #1 and #2 are very important and I know we’ll be in a good financial position if we ever get to #9 and #10.

  7. Yes #7 is specific to folks in a Pension Plan (such as myself), if staying at work does not increase your pension (i.e. you are fully vested) QUIT!!!! The amount of money you are spending “going to work” is less than any increase in pension you might get from Income increases (typically your Pension is based on your best 5 years income).

    Retire already, if you want to keep working, work somewhere else and start another pension :-).

    1. There may be other reasons for continuing beyond maximum pension accumulation. Age penalty for example (happened to me). Or health/dental coverage for dependants that may be suspended upon retirement. One guy I know stayed so his daughter would qualify for a university scholarship. It’s not always a black or white issue.

    2. BCM, you are very lucky to have your pension plan and you’ll be more than fine in retirement if you have no debt. All that government pension money can go towards spoiling your adult kids and/or any grandkids 🙂

  8. “How do you know you can retire (or you need to wait)? What items would you add to my list?”
    To be able to buy a $2M album, like Shkreli Martin did… OK j/k 😛

      1. i was trying to be funny but failed. it’s a great list mark and anyone who can accomplish it will be on easy street. they are goals everyone should strive for but they shouldn’t scare anyone from their retirement date. keep up the great work mark; i for one enjoy ALL your articles.

        1. Sorry Gary! I figured you were joking but wasn’t sure 🙂 There are a few bloggers I interact with that probably have most of this list covered, and kudos to them. We’re certainly not there yet but every year bit of saving and investing each month helps! Thanks for reading Gary.

  9. While such a list might be thought provoking, I would caution people to be wary of putting a lot of stock into narrowly focused parameters. For example, I would add “and is it sustainable” to #1. And I know of no one that would fit into #5. A severe downturn in the economy would impact earnings of companies that pay those dividends referenced in #1. One should also consider such things as their health, the health of their spouses/children, the stability of their marriage, etc etc. Any one of these things going south can have a severe impact on a financial plan.

    1. Good point Lloyd, the income must be “sustainable” for #1, not just at a point in time. Healthcare is certainly a wild card in retirement, it could be very expensive in another few decades.

  10. Nice list, Mark. Almost all of them are way down the road for me – so I wouldnt say I am ready to retire yet 🙂 But I have the next couple of decades to get to that point. Hoping to keep my investment growing over the years.



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