Warning Signs It's Time to Retire — Risks of the 'One-More-Year' Trap

Deciding when to retire blends financial math with personal realities. Clear signals that it may be time include worsening health, persistent burnout, growing caregiving duties, declining job satisfaction, or when your ability to save no longer outpaces rising costs — especially healthcare. People who stay for "one more year" often overlook hidden and compounding costs: health setbacks that reduce quality of life, workplace stress that accelerates decline, and the financial risk of poor market returns just before you start withdrawing.

On the financial side, delaying retirement involves trade-offs. Postponing Social Security can increase monthly benefits, but extending your work life to wait for a market rebound can backfire if equities fall before you retire. A final high-earning year can push you into a higher tax bracket, raise Medicare premiums and increase taxes on retirement withdrawals. Sequence-of-returns risk — suffering losses early in retirement — is a chief concern if you delay and then face a market downturn.

Nonfinancial warning signs matter just as much. Lengthy commutes, long hours or cognitive strain that lower your quality of life may mean the extra income isn't worth the physical and emotional toll. Caregiving responsibilities for a spouse or parent often force an earlier exit. Changes in employer support, reduced flexibility, or loss of meaningful work are practical cues that your job is no longer sustainable.

Rather than rely on a single "one-more-year" assumption, model scenarios. Run conservative stress tests on your portfolio that include early down markets; map cash flow for different Social Security claiming ages and pension options; and estimate the tax impact of a last high-income year. Consider sequencing withdrawals to manage taxes — for example delaying Social Security while drawing selectively from taxable or tax-deferred accounts depending on your situation.

Practical next steps include consulting a certified financial planner, reviewing health-insurance options if you are under 65, and checking which employer benefits expire at termination (stock grants, retiree health). A pre-retirement sabbatical or reduced hours can also reveal whether you are ready emotionally.

Retirement timing rarely rests on a single number. Weigh financial readiness alongside health, purpose and lifestyle. Spotting warning signs early and stress-testing realistic scenarios will help you avoid the costly "just one more year" trap.