The real reasons people retire

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

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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 9,372 preretirees and 2,293 retirees, including 451 people who never plan to retire. The online survey was conducted by Fidelity Investments in collaboration with the Stanford Center on Longevity and Greenwald & Associates1 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 nonfinancial 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, and 62% cited a desire to spend more time with grandchildren.

Will I be ready to retire?“There seems to be a values shift as people near retirement,” says Stanford’s Steve Vernon. “Even if they haven’t reached their retirement goal in dollar terms, many seem to desire freedom over money.” Some 80% of both preretirees and recent retirees in Fidelity’s survey view retirement as a new stage of life. Most say they look forward to the freedom that retirement brings. Says Vernon, “It’s the first time many can actually breathe and live life.”

Three phases of “pretirement”

The Fidelity research team found that there are three distinct phases of "pretirement" that many preretirees go through and assumes they will have some control over the actual timing of their retirement. The phases are not age-based, but rooted in life stage.

  • 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.
  • In mid-pretirement (two to nine 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.
  • By late pretirement (less than two 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 in the past two years, 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 for your “someday”—both financially and emotionally.

Rev up your retirement savings. In our survey, health care costs, the economy, and lack of confidence that preretirees could make their money last throughout their retirement were the three most important financial factors in the decision to keep working. If these factors resonate with you, consider the following steps to help boost your retirement readiness:

  • Try to turn any extra money—bonuses, raises, or reduced expenses—into savings.
  • Max out on tax-advantaged workplace retirement plans like 401(k)s, and contribute at least enough to meet any company match.
  • If you can save more, contribute to an IRA.
  • If you are age 50 or older, take advantage of additional catch-up contributions for both 401(k)s and IRAs.
  • Reduce and ultimately eliminate any high interest rate debt.
  • Invest appropriately for your age, risk tolerance, and goals, either on your own, or consider using a managed account.  

To see where you stand, try Fidelity's Planning and Guidance Center (log in required). If you need help to develop a retirement savings and income plan, a Fidelity investment professional can assist.

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 $260,000 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 preretirees 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, stressful job, new technology, terrible commute, etc.) and develop coping strategies. When the stress of work clearly begins to negatively affect your health, it may be time to accelerate your transition to retirement—and preserve your peace of mind.

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

So take the time to imagine your someday. 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, 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.

Bottom line

"Every someday needs a plan" means more than a financial plan. It means an overall plan for your well-being in retirement.

Retirement factors: a checklist for “pretirees”

Having enough money to live comfortably in retirement is only part of a successful retirement plan. Take into account both the financial and nonfinancial factors like those below.


  • 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-three list.
  • What would you like to do? Try filling out a one-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 five years of retirement.
  • Have you discussed your dreams with your spouse? 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?


  • Do you understand 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 is to stay healthy. Go for a walk and make some healthy resolutions.


  • 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 volunteer opportunities you can pursue in retirement that leverage your skill set, hidden talents, and interests.



  • Get a holistic view of your retirement plan with our Planning & Guidance Center (log in required), and explore changes that may help you become better prepared. 


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1. The Fidelity Investments Decision to Retire research represents insights from a series of in-depth interviews conducted in Boston, Chicago, and San Francisco (April 2015), and from an online survey of more than 12,000 defined contribution plan participants recordkept by Fidelity, ranging in age from 55 to 80 across all industries and income levels, who felt they had some control over their decision to retire. The research was completed in August 2015 by Greenwald & Associates, Inc., an independent third-party research firm. Fidelity also worked in collaboration with the Stanford Center on Longevity on the study.
2. 2016 Fidelity analysis performed by its Benefits Consulting group. Estimate based on a hypothetical couple retiring in 2016, at 65 years old, with average life expectancies of 85 for a male and 87 for a female. Estimates are calculated for “average” retirees but may be more or less depending on actual health status, area of residence, and longevity. The Fidelity Retiree Health Care Costs Estimate assumes that individuals do not have employer-provided retiree health care coverage but do qualify for the federal government’s insurance program, Original Medicare. The calculation takes into account cost-sharing provisions (such as deductibles and coinsurance) associated with Medicare Part A and Part B (inpatient and outpatient medical insurance). It also considers Medicare Part D (prescription drug coverage) premiums and out-of-pocket costs, as well as certain services excluded by Original Medicare. The estimate does not include other health-related expenses, such as over-the-counter medications, most dental services, and long-term care. Life expectancies are based on research and analysis by Fidelity’s Benefits Consulting group and data from the Society of Actuaries, 2014.

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
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