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Questions to Ask Before Quitting Your Job or Deciding to Retire

Questions to Ask Before Quitting Your Job or Deciding to Retire

December 01, 2020

Why am I feeling this way?


There are various reasons driving Americans to exit their jobs. Some have realized that life is too short to remain in unfulfilling roles, with the pandemic underscoring this perspective. Others have embraced the work-life balance facilitated by remote work and are reluctant to revert to pre-pandemic norms. Many are grappling with burnout, with a survey from Indeed indicating that 52% of respondents reported burnout in 2021, up from 43% before the pandemic. Burnout affects both older and younger workers. Identifying the root cause of your dissatisfaction is crucial, as it may lead to alternative solutions rather than resignation.


How long have I been feeling this way?


Burnout rates have surged since the pandemic's onset. If your mental health has deteriorated during this time, it might be related to pandemic-induced stress rather than your job specifically. You might just need a break to recharge. However, if your thoughts of quitting have persisted for over two years, it might be time to take action.


Have I explored all of my options?


If work, in general, is a major source of stress, resigning might seem like the only solution. Nevertheless, if your issues are more specific, there may be remedies within your grasp. Explore alternatives within your organization or discuss adjustments to your working conditions, such as modified hours or continued remote work. Before making a decision, especially one that affects your financial stability, make sure you've exhausted all possible options.


What do I want to do instead?


Whether you're considering quitting your job or retiring early, take time to envision what you'd like to do next. Hastily pursuing another job without identifying the underlying reason for leaving may exacerbate the situation. For those aiming for early retirement, plan how you'll spend your time without work. Many retirees eventually reenter the workforce for financial or personal fulfillment reasons. Formulating a post-job plan can help you avoid an identity crisis.


What would my perfect day look like?


Imagine your ideal day. If you can't envision a scenario where you are consistently content, your issue may be more complex than simply disliking your job. However, visualizing your ideal future can guide your next steps. Consider what kind of job would make you happy, whether it offers more freedom, remote work, or a shift to a different industry. Journaling or meditation can help clarify your aspirations.


How would quitting my job impact my loved ones?


Quitting your job is a personal decision, but if others depend on your income, consider the consequences on their lives. A sudden loss of income could lead to significant lifestyle changes. Ensure everyone affected is on board with the decision or is willing to help mitigate any financial shortfalls.


What do I gain by quitting?


Human brains are wired to focus on potential threats, leading to negative thinking. To make an informed decision, consider the positive aspects of quitting. A new job may offer improved work-life balance, while early retirement may grant more family time or allow you to focus on mental health. This perspective shift can help determine if quitting is the best choice for you and your loved ones.


What will I lose by quitting?


Be realistic about your decision. Identify what you'll lose by quitting, which may include security, stability, salary, and healthcare benefits. List these losses and assess how they affect your stress and anxiety levels. If any loss causes significant distress, reconsider your decision.


Are my expectations realistic?


Survey data shows that many Americans desire remote work, but not all jobs accommodate it effectively. Ensure your expectations align with reality. If your desired conditions are unavailable, consider adjusting your expectations temporarily.


Can I afford to quit my job?


Before quitting, calculate how long you can sustain yourself without income if you plan to return to the workforce eventually. If you aim to retire early, ensure you have sufficient savings to maintain your desired lifestyle. Even if immediate retirement isn't financially viable, you can make strategic financial moves in the meantime to work towards your goal.


If you've thoroughly considered these questions and remain eager to continue working, that's fantastic! You've resolved to embark on a career change.


However, if you've concluded that working is no longer your preference, it's essential to explore these crucial questions, conduct thorough research, and make strategic decisions to ensure a smooth and confident transition into retirement.


It's natural for worries to crop up along the way. Does this mean you're not ready to retire just yet? Not necessarily. Take a moment to pause and reflect. After all, retiring is one of the most significant decisions you'll ever make, and it's okay if new factors come into play that might influence your retirement plans. The key is to address these issues proactively, so you can retire on your own terms.


To assist you in this process, we've put together a retirement checklist that will help you gather the necessary information and set yourself up for that eagerly anticipated finish line on the horizon.


Here's your retirement checklist:


  • What to Ask Your Employer/HR Department When Preparing for Retirement:
    • What retirement date aligns best with my pension plan (or other defined benefits), considering factors like my birthdate or tenure?
    • If I have a pension plan (or other defined benefit), what options are available to me, such as a lump-sum amount, a monthly benefit, or a rollover into another retirement account, and which option is most suitable for my situation?
    • Are there stock options or any additional benefits that need to be exercised before, or within a specific timeframe after, my retirement or "separation from service"?


  • What to Ask About Health Insurance Options When Preparing for Retirement:
    • How much insurance coverage do I currently have, both now and in retirement (including options like exchanges and Medicare), and what will it cost me?
    • Can I extend my current healthcare plan's coverage through options like COBRA, and what would be the associated cost?
    • Is there a marketplace where I can shop for healthcare coverage, and can I join my spouse's healthcare plan?
    • I will turn 65 three months before my retirement. What Medicare options are available (Part A, B, C, D, etc.), and which ones are the most suitable for me?
    • Am I prepared for long-term care (LTC) in retirement, and what options do I have for planning for LTC?
    • How will I fund healthcare costs during retirement, and which accounts (HSA, IRAs, investment accounts, etc.) can I draw from and when?


  • What to Ask About Social Security When Preparing for Retirement:
    • Based on my work history, what will my Social Security benefits be at the earliest age, full retirement age, and at age 70?
    • What other Social Security benefits are available to me (spousal, survivor benefits, etc.), and what is their estimated value?
    • When should I apply for Social Security benefits, and how do I do so?


  • What to Ask Your Financial Advisor When Preparing for Retirement:
    • Is now still the right time to retire, and should I reevaluate my goals in light of the current economic climate and its impact on my retirement plan?
    • What updates, if any, should be made to my financial plan, and how much income will I need in retirement?
    • What changes or adjustments are required for my investment accounts, and what sources of income should I expect in retirement (pension, Social Security, retirement accounts, taxable investment accounts, etc.)?
    • What is the strategy for taking distributions from my investment accounts? Will I draw from each account in a specific order or from multiple accounts simultaneously?
    • What should I do with my retirement plans (e.g., 401(k), 403(b), 457, etc.) from my former employer?


  • What to Ask Your Tax Advisor or CPA When Preparing for Retirement:
    • What does my current tax situation look like, especially if I'm currently self-employed?
    • How will my tax situation change when I start taking income from sources other than a regular paycheck?
    • Would a Roth conversion benefit me this year, considering market volatility?
    • Should I consider Roth or traditional contributions before or during retirement, based on factors like my tax bracket and income in retirement?
    • If I continue working in a reduced capacity (e.g., freelance consulting), how will it affect my retirement benefits and other financial responsibilities (Social Security benefits, health insurance coverage, LTC, taxes, etc.)?


  • What to Ask Your Loved Ones When Preparing for Retirement:
    • How will our daily life change now that I'm retiring, and what are our mutual expectations?
    • What adjustments do we need to make to prioritize our relationship during retirement?
    • What insights can colleagues or friends who have recently retired share about their retirement experiences?


  • What to Ask Yourself When Preparing for Retirement:
    • What will my new schedule look like in semi-retirement, and how much time will I allocate to work, if any?
    • How will I stay engaged in activities I enjoy during retirement, whether it's traveling, volunteering, or pursuing new hobbies?
    • What is my plan for staying connected with my community after retiring?


Finally, the most important question on this retirement checklist:


  • How will I celebrate this significant milestone?


It's worth emphasizing: Retirement is a monumental decision, and despite the busy and fulfilling life you've led, taking the time to prepare for this transition is crucial.


If the timing feels right but you have more retirement questions or need a personalized retirement checklist, remember that we're here to assist you.