Can I Retire? Benchmarks to Consider in Making the Retirement Decision

The decision to retire is a significant life-cycle event for a financial planner's client(s). To aid financial planners and their clients in this process, we analyze a longitudinal database of individuals who have retired or are near retirement. We summarize the findings and provide both financial and nonfinancial benchmarks that clients can use in arriving at their own retirement decision. Among the variables examined, we find that age, health, a spouse's retirement status, and mortgage debt are the factors that most significantly influence the decision to retire. We also illustrate differences found between those who decide to retire and those who do not by providing eight benchmark scenarios. The first four scenarios compare retired and nonretired married couples based on their reported health status, while the second set of comparisons is based on the ownership of business assets.

Retirement Planning

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