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It’s not just about money. Health, family, and lifestyle choices are also key.

Key takeaways

While financial and work-related factors are the primary reasons people continue to work, nonfinancial factors like family, health, and lifestyle ultimately cause people to pull the trigger to retire.

Well-being in retirement is not just about money, or even intellectual stimulation. It's largely about the freedom to do what you want, when you want.

As you enter a stage of pre-retirement, consider working with your financial advisor to help shape strategies for Social Security, health care, and cash flow in retirement.

When will you be ready to retire? Particularly if retirement is still far away, you're probably thinking in terms of dollars—how many you will have and how long they will last. But new research finds that for many people, the decision to retire is not just about money. It's about life, and the freedom to enjoy it.

That's the conclusion of an extensive survey of over 10,000 pre-retirees and recent retirees. The online survey was conducted by Fidelity Investments in collaboration with the Stanford Center on Longevity and Greenwald & Associates and only included respondents who believed they had some control over if and when they would stop working full-time.

While financial and work-related factors are the primary reasons people continue to work, with eligibility for Medicare and Social Security as key factors, the survey also finds that it's often non-financial factors like family, health, and lifestyle that ultimately cause people to pull the trigger to retire.

Among retirees, 72% chose leisure as a very or somewhat strong reason to retire, 64% pointed to stress at work, 63% cited a desire to spend more time with grandchildren, 55% chose pursuit of hobbies, and 54% chose travel as their primary reason to retire.

"We've seen a shift in values as people near retirement," says Fidelity's Eliza Badeau. "Many people seem to desire freedom over money. It's less about the money and more about spending time where it matters most to them," she adds. "Most people say they look forward to the freedom that retirement brings such as spending time with their family or doing hobbies they enjoy—ultimately trading in that job stress for leisurely interests."

3 phases of "pretirement"

The research found that there are 3 distinct phases of "pretirement" that many pre-retirees go through and assume they will have some control over the actual timing of their retirement. The phases are not age-based, but rooted in life stages.

(1) In early pretirement (10 or more years out), the survey finds that most people still have significant debt, are not sure they can make their money last, and are likely to still have children and/or aging parents to support. People in this stage are generally in good health, happy with their job, and looking forward to new professional challenges.

(2) In mid-pretirement (2 to 9 years out), people are starting to reduce debt, are less responsible financially for their children, and are feeling as though they might be able to make their money last throughout retirement. Meanwhile, their professional drive may plateau. They may still like their job, but find themselves less interested in new opportunities—and more interested in free time for leisure and family.

(3) By late pretirement (less than 2 years out), people's priorities have shifted. They feel more confident that they can make their money last through retirement. They often feel more job-related stress, and no longer look for new job-related opportunities—they've effectively put their resume to bed. Many feel that their physical stamina declines along with their mental sharpness. They really want more time for leisure and family.

The emotions connected to retirement shift along the way too. In early pretirement, some people are stressed about their ability to live comfortably in retirement. But by the time they reach late pretirement, most feel more financially secure and excited about a new chapter. Among recent retirees, those who left their primary career within 2 years of participating in this survey, almost 80% say it's easier than they thought to live comfortably in retirement and 85% say it's the most rewarding time of their lives. Only 10% say they are worried about being bored.

What does this mean for you?

Here are a few tips to make sure you are ready—both financially and emotionally.

Rev up your retirement savings. In our survey, health care costs, general economic conditions, and lack of confidence that pre-retirees could make their money last throughout their retirement were the 3 most important financial factors in the decision to keep working. If these factors resonate with you, consider working with an advisor on the following steps to help boost your retirement readiness:

1. Try to turn any extra money—bonuses, raises, or reduced expenses—into savings.

2. Max out on tax-advantaged workplace retirement plans like 401(k) or 403(b) plans, and contribute at least enough to meet any company match.

3. If you can save more, contribute to an IRAs as well.

4. If you are age 50 or older, take advantage of additional catch-up contributions for both 401(k)s, 403(b)s, and IRAs.

5. Reduce and ultimately eliminate any high-interest rate debt.

6. Invest appropriately for your age, risk tolerance, and goals, either on your own, or consider using a managed account.

Make sure you plan for health care costs and your health too. Remember that Medicare does not kick in until age 65 and, even then, it does not cover all health care costs in retirement. Fidelity estimates that a 65-year-old couple should expect to spend $285,000 over the course of retirement on health care costs on average.2 So you will want to factor in those costs as well. If you have a health savings account at work, it can help you save for health care costs in retirement. Also, consider purchasing long-term-care insurance.

Perhaps most important, try to stay healthy and attempt to manage stress. Among pre-retirees in our survey, 55% said stress was a "strong" or "somewhat strong" factor in their decision to leave the workforce. Among retirees, it was 64%. Know the causes of stress in your life (poor health, demanding job, new technology, terrible commute, etc.) and develop coping strategies. When the stress of work clearly begins to negatively affect your health (despite efforts to find ways to manage the current challenges), it may be time to accelerate your transition to retirement—and preserve your peace of mind.

Finally, remember that well-being in retirement is not just about money, or even intellectual stimulation. As pre-retirees and retirees told us, it's also about the freedom to do what you want, when you want.

Think about what is important to you, and how you want to spend your time. Maybe it's traveling, or reading, or fishing, or jumping out of a plane (with a parachute of course), as one 90-year-old recently did. Maybe it's starting a new business, consulting, mentoring others, or volunteering. Or maybe it's spending more time with your spouse or your kids and grandkids.

Why people keep working: 67% respond money, 29% job, 21% lifestyle, 19% Health, and 11% Family.

Now may be the time to take your sabbatical

While working full-time, you probably did not have a lot of time for reflection to think about "what's next?" Assuming you've achieved financial freedom as a new retiree, you'll likely deal with a lot of emotion as you begin to see yourself in a new light and ask: What do I want to do now? What is my passion? How do I want to spend my time?

One way to ease the transition to retirement is to think about this new phase of your life as a sabbatical, advises Chris Farrell, author of Purpose and a Paycheck. "Older adults want a break from the demands of a job. They retire. Yet they often return to the workforce within a year or 2. In fact, about 40% of Americans age 65 and older who are currently employed were retired at some time in the past," says Farrell.

He adds: "In other words, consider taking a sabbatical to recharge your batteries and think through what you want to do next."

Part-time employment and flexible jobs are popular. So is nonprofit work, especially for those with careers in for-profit companies and professional organizations. These encore careers typically come with a smaller paycheck, but the mission or cause of the organization is meaningful. Entrepreneurship and self-employment are attractive to many people at this stage of life.

"A key to success is your willingness to experiment, to see what jobs might intrigue you and steering clear of pursuits that leave you cold," says Farrell. "You'll want to focus on understanding the skills and knowledge you've developed over the years. Skills are very different from jobs and job titles. Adopt an entrepreneurial mindset when it comes to exploring what comes next, even if you've never considered starting your own business before."

Tip: Experienced workers usually find new jobs and opportunities through their network, says Farrell. During your sabbatical, talk to the people in your network. Ask them to identify your top skills and interests. Make a list. What do they see you doing next? Ask them to tap into their network to set up informational interviews for you during your sabbatical. Remember, most jobs come from a referral rather than a resume.

Plan ahead

You may be ready to stop working, or you may just be thinking about doing so financially and emotionally. Whichever is the case, consider working with an advisor to help shape your strategy for Social Security, health care, and cash flow in retirement. It can help you get where you want to go. For many people, the decision to retire is not just about money. It's about life, and the freedom to enjoy it.

Retirement factors: A checklist for "pretirees"

Financial (consider discussing with your finacial advisor)

Are you financially ready to retire?

How can you take advantage of ways to save more?

What steps are needed to create a retirement income and portfolio strategy to make the most of your retirement assets?

Do you have an understanding of how health care and Social Security will affect your expenses and income strategy in retirement?


Imagine that you will have unlimited time and resources upon retirement. What unfulfilled passion or dream would you wholeheartedly pursue?

Recall all the things you loved doing in your teens or twenties (e.g., hiking, dancing, traveling, playing guitar) and make a plan to bring the joy of those experiences back into your life—in a new way.

Where would you like to live? Make a Top 3 list.

What would you like to do? Try filling out a 1-month retirement calendar to make your priorities tangible.

Make a "bucket list" of special things you want to do and places you want to visit during your first 5 years of retirement.

Have you discussed your dreams with your spouse or partner? If not, make a date to discuss.

Family and friends

Do you want to spend more time with your spouse? In our study, nearly 60% of husbands want to spend more time with their wives in retirement, but only 43% of wives want to spend more time with their husbands.

Examine the role you’ll play with your extended family. How might being a grandparent be different (perhaps even better) than raising your own kids? How much time do you want to spend with them?

What about friends? Are there friends you want to reconnect with? Are there coworkers you may want to keep in touch with? How will you grow and maintain friendships? How will you meet new people?


Do you understand your options for enrolling in Medicare?

Do you have a retiree medical plan? If so, do you understand your benefits?

Do you need supplemental medical insurance?

Are you under stress at work? How can you reduce it?

The best way to reduce health costs over time is to stay healthy. Go for a walk and make some healthy resolutions, like improving your diet.


Think about how much longer you really want to work.

Ask coworkers and your HR department about "phased retirement" or part-time or flexible work options. You may be able to reduce your work schedule while maintaining health benefits.

Participate in "mentoring" programs that allow you to share your skills and wisdom with younger work colleagues.

Begin to explore encore careers and volunteer opportunities you can pursue in retirement that leverage your skill set, hidden talents, and interests.

Fidelity Viewpoints – 05/20/2019 

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