When Should I Stop Working?
Knowing when to say goodbye to the workplace is a tough decision, and there's more to it than just money.
Why Money is Just One Part of the Equation
Choosing the right time to retire is not a one-size-fits-all solution. Many Canadians retire around age 65 since that’s when government retirement benefits such as Old Age Security (OAS) are designed to start. While money is a significant factor in knowing when you may be able to retire, there are other benefits that your workplace may offer that can help you decide if you are ready to retire.
Here are a few things to think about:
Understand Your Income Needs
The income you’re going to need in retirement, how much money you have already saved and the government benefits you’re entitled to, all influence when you may be able to retire.
If you’re not sure where you stand, consider creating a budget. Our Retirement Budget Calculator can help you do a quick analysis. You can also meet with an RBC Financial Planner, who can review your budget with you to make sure you’re on the right track.
One thing to consider is the income you may be eligible to receive from government benefits such as CPP/QPP.
You can decide when to begin receiving CPP/QPP payments based on your individual circ*mstances. For example, you can take the benefits as early as age 60 if you need the income—or as late as age 70 if you don’t. The decision on when to take CPP/QPP is final, so keep in mind that:
- If you take CPP/QPP before you turn 65, your payments will be lower.
- If you delay payments until after age 65, you could enjoy a higher benefit amount.
Learn more about knowing when to take CPP/QPP.
Consider the Social Aspects of Your Work
According to a 75-year study of adult development conducted by Harvard University, relationships and social connections are key to helping people stay happy and healthy.1
If you have meaningful social connections at work, leaving your job could also mean leaving those connections behind. Consider how you’ll create new relationships and maintain existing ones after you retire.
Know When to Focus on Your Health
Your health can be another important consideration in deciding when to retire. Check in periodically with yourself to see how you’re feeling—including your stress levels—and note if you’re spending more time working than taking care of yourself.
Think About What Gets You Out of Bed in the Morning
For many people, working provides a sense of purpose and structure. If you still look forward to going to work every day, that can be a very important reason to wait on retirement, even if you’re ready financially.
Another thing to consider? The average Canadian spends 2,000 hours a year at work. That’s a lot of time, so it’s good to start thinking about how you might like to fill that time once you retire.
Deciding What’s Right for You
Knowing when to leave work and start retirement is ultimately up to you, but an RBC Financial Planner can walk you through your options to help you make a decision that you can feel confident about.
For even more tips on timing your retirement, check out this short message from Bill Hill, National Retirement Planning Consultant at RBC:
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Let’s Start the Conversation
1
Mineo, Liz. “Over Nearly 80 Years, Harvard Study Has Been Showing How to Live a Healthy and Happy Life.” Harvard Gazette. Harvard Gazette, November 26, 2018. https://news.harvard.edu/gazette/story/2017/04/over-nearly-80-years-harvard-study-has-been-showing-how-to-live-a-healthy-and-happy-life/.
This document is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsem*nt of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
Financial planning services and investment advice are provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.
