News & Trending

6 Reasons Not To Retire in the Summer (And When’s the Best Time of Year To Do It)

Timing your exit can make a big difference to your retirement transition.

couple rest at tropical resort
Updated Sept. 24, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

If you're ready to ride off into the sunset of retirement, it can be tempting to leave your job when the summer sun is shining. While everyone’s situation is different, there are some strong reasons to stay at your job until summer’s golden glow fades away.

We explore some of the reasons why retiring in the summer might not be the right move and when might be a better time to leave the working world.

Steal this billionaire wealth-building technique

The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.

A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.

If you have at least $10K to invest and are ready to explore diversifying beyond stocks and bonds, see what Masterworks has on offer. (Hurry, they often sell out!)

May miss year-end bonus or profit-sharing payout

freebird7977/Adobe activity after retirement in vacations

If your company offers year-end bonuses, you’re likely to miss out on that potential windfall if you throw in the towel halfway through the year. The same concept holds true for profit-sharing payouts, which often happen toward the end of the year.

For many retirees, passing up an opportunity for an influx of cash is less than ideal.

If you're eyeing retirement, take a minute to consider your company’s bonus schedule. It might be worth waiting around to accept a helpful check before heading for the door.

Tax bracket may change for half the year

Rawpixel.com/Adobe happy senior women working out outdoors

If you leave your job halfway through the year, it will likely impact your tax bracket. Before leaving your employer, take some time to see how your tax situation is impacted.

For some, leaving means a drop in your income for the year and a lower tax bill. But if you're taking retirement benefits, accepting commissions, receiving compensation for unpaid vacation leave, or increasing your income through a consultant position, a rising income could bump you into the next tax bracket.

Depending on the changes to your income, you might decide to stick it out until the end of the year. But it’s a good idea to run the numbers on your own or with an accountant before moving forward.

Your retirement benefits could change

bernardbodo/Adobe couple finalising budget for vacation

If you are on track to receive a pension, the number of years you’ve served the company makes a difference. With some pension plans, working a single day into the next year will increase your years of service, which in turn could increase your pension benefits.

It’s worth checking into the details to see if staying with your company for a few more months could boost your retirement benefits.

Earn $200 cash rewards bonus with this incredible card

There's a credit card that's making waves with its amazing bonus and benefits. The Wells Fargo Active Cash® Card(Rates and fees) has no annual fee and you can earn $200 after spending $500 in purchases in the first 3 months.

The Active Cash Card puts cash back into your wallet. Cardholders can earn unlimited 2% cash rewards on purchases — easy! That's one of the best cash rewards options available.

This card also offers an intro APR of 0% for 12 months from account opening on purchases and qualifying balance transfers (then 19.74%, 24.74%, or 29.74% Variable). Which is great for someone who wants a break from high interest rates, while still earning rewards.

The best part? There's no annual fee.

Click here to apply now.

Stocks can change seasonally

vitaliy_melnik/Adobe man fishing at sunset in lake

While it’s impossible to predict the future of the stock market, it is possible to look at past trends. In the past, the stock market has had a lower performance between May to October compared with the rest of the year. 

If you plan on selling shares of your stock holding to cover your retirement expenses, leaving in the middle of the summer may not be an ideal time to sell.

For retirees who can stick it out until the fall, you might see a stronger market when you go to sell your stocks.

Wait until you're fully vested

STOATPHOTO/Adobe early retirement

Many companies offer vesting plans, which means that the funds your employer contributes to your retirement accounts aren’t fully yours until you meet particular service requirements. Even missing the mark by a month or two could mean you are leaving money on the table.

Take the time to review the details of your employer’s vesting policy before saying goodbye. If you need to hit a vesting milestone to have full access to your employer’s retirement contributions, it’s usually a good idea to wait it out.

Make sure your health care is solid

Kawee/Adobe male friends playing chess

Paying for health care is often a large part of your retirement plans. While most qualify for Medicare at age 65, those who want to retire early will need to cover their health plan costs another way.

Some early retirees rely on COBRA, but COBRA coverage usually has a time limit. With that, you’ll need to confirm you have this coverage until you are eligible for Medicare or seek out another solution for your health care needs.

For example, you might shop for policy on Healthcare.gov. Get your health care needs in place before retiring in order to build this cost into your retirement planning budget.

Bottom line

Spotmatik/Adobe happy senior friends sailing luxury yacht

Retiring is a major decision for many reasons, including your financial situation. 

If you want to enjoy a stress-free retirement, it's helpful to consider all of the factors involved. Depending on your situation, you might decide to wait a few extra months before retiring.

Lucrative, Flat-Rate Cash Rewards

5.0
info

Wells Fargo Active Cash® Card

Current Offer

$200 cash rewards bonus after spending $500 in purchases in the first 3 months

Annual Fee

$0

Rewards Rate

Earn unlimited 2% cash rewards on purchases

Benefits and Drawbacks
Card Details


Author Details

Sarah Sharkey

Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make more informed decisions. She covers mortgages, insurance, money management, travel, and more.