'I have a sense of timing': Jerry Seinfeld turned down more than $100M to make one more season of 'Seinfeld' — here's why and how you can tell when it's time to retire

Trust your timing

Retirement has earned the nickname “golden years” for good reason. It’s time that you’ve earned through a lifetime of hard work to relax, spend time with family and live a life of leisure.

But even if you’ve spent 40 years saving and investing in preparation for retirement, deciding exactly when to call it quits on your career can be tricky — especially when, like Seinfeld, you have a golden opportunity to shore up your finances by working a little longer.

If you’re reaching retirement age but still feeling happy, fulfilled and are finding meaning in your work, delaying retirement by even one year can have a big impact on your finances.

You’ll earn another year of salary, and if your employer offers a 401(k) plan, you’ll be able to stash away another $22,500 in 2023 — or a whopping $30,000 if you are age 50 or older — which will compound and grow (along with the rest of your retirement savings) over time.

Another benefit to working longer is that it may delay when you start to claim Social Security. The earliest Amercians can start claiming Social Security is age 62, but those who opt to delay receive higher monthly payments, with the maximum benefits available to those who claim starting age 70 or older.

There are many reasons why people claim Social Security before they reach the full retirement age — but keep in mind that waiting will secure you a bigger monthly check when you may be less able to go back to work to earn some quick cash.

While there are financial benefits to working longer, remember that your time gets increasingly more valuable as you age. It’s important to figure out your priorities. If your career no longer features on your “most important list,” then it might be time to let go and enjoy your retirement.

Discover How a Simple Decision Today Could Lead to an Extra $1.3 Million in Retirement

Learn how you can set yourself up for a more prosperous future by exploring why so many people who work with financial advisors retire with more wealth.

Discover the full story and see how you could be on the path to an extra $1.3 million in retirement.

Read More

Figure out your finances

One of the most common questions that soon-to-be retirees have is: how much money will I need?

That sum is going to be different for everyone based on timeline, lifestyle, where you want to retire, any outstanding debts — including credit cards, personal loans and mortgages — and your overall financial goals.

There are several different schools of thought you can draw inspiration from to reach your magic number without resorting to the nice round sum of $1 million, which may not actually cut it today as inflation and health-care costs take bigger bites out of Americans’ budgets.

For years, financial planners and retirees have relied on the “4% rule,” which states retirees should plan to withdraw 4% of their assets every year, increasing or decreasing that distribution annually based on inflation. The 4% rule is based on the notion that retirement savings should sustain you for at least 30 years, which may not work for you if you plan to retire early or keep working into your 70s.

You may also want to consider the “multiply by 25 rule,” where you need to think about how much annual income you'd like to have in retirement, then multiply it by 25 — and that's how much you should save. So if you want to live on $60,000 a year for 25 years of retirement, you'd need to have $1.5 million socked away.

Neither rule is perfect, but they can be a good springboard for thinking about your retirement finances. If you’re still unsure about where to start or how to plan for your golden years, you may want to consider working with a financial adviser who can help you concoct a plan that best suits your needs.