Is 2027 your year to retire, or should you prepare a little more and work another year? That may be the question running through your mind as we round out 2026. After all, it's been pretty tumultuous. Inflation is up 3.7%, gas is over $4 a gallon and the stock market has been volatile. At the same time, 401(k) balances are at record highs and there are more 401(k) millionaires than ever before.
If you have been doing your job and saving, you may be thinking you're ready. You've got the cash and the means, so why not go for it? It turns out there's a lot more to it than the balance in your retirement accounts.
"It's a conversation we're having a lot right now with consumer sentiment so low and what's happening out in the world," said Kelli Smith, a financial planner at Edelman Financial Engines. "Can you really afford to retire next year, and how do you feel about it?"
To help you decide, we've created a choose-your-own-path type guide. Read on to see which path may be best for you.
Retire in 2027? Work One More Year?
Retire in 2027 if you know exactly what your retirement expenses will be each month: If retirement is only months away, a general idea of your monthly spending isn't enough; you should know exactly how much you'll spend and have a strategy. "Is your plan thorough?" says Smith. "Can it support your lifestyle, healthcare and income taxes in retirement?"
Work one more year if you don't have a retirement budget: If you're going off a rough estimate or plan to wing it, work one more year and create a detailed budget. To be extra ready: Smith says to follow that budget the year you're still working. You'll see if that's the right amount. Plus, it gives you a chance to save more.
Retire in 2027 if you're comfortable with the amount you saved: Most Americans think they need over $1 million to live comfortably in retirement, but that varies based on your unique situation. Some need more and some less. Whatever your number, once you reach it, a major retirement hurdle is gone.
Work one more year if you are unsure about your number: If you are feeling a little bit unsure about your retirement balance, working one more year can help build up your confidence. It's an additional twelve months to max out your retirement accounts, pay down any high-interest debt and save more. "A penny saved is a penny earned," says Smith. "Use the year to feel more comfortable."
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Retire in 2027 if you have a withdrawal strategy: Do you know how much you plan to withdraw regularly, and does it account for inflation and any market downturns, particularly early in retirement? If you can answer yes, then it's another aspect of retirement readiness you can check off. A tax-smart plan for when and how much you withdraw in retirement will ensure your money lasts and give you permission to spend.
Work one more year if you plan to figure it out as you go: If you don't have a plan for using your money in retirement, another year may benefit you. Withdrawing as you go can lead to running out of money prematurely. That's particularly true during market downturns. To help build a strategy, check out our rules series, including the 4% rule, the bucket approach, guardrails and the pay yourself first strategy.
Retire in 2027 if you know what you'll do with your free time: Retirement isn't only about your finances; it's about your emotional health. Happy retirees typically have a passion that gives them a purpose and a sense of community. It can be volunteer work, a part-time job or spending time with friends and family. Whatever it is, if you know what your retirement passion will be, or at least have a list to try, it's a good sign you're ready to retire.
"It comes down to defining a lifestyle, not a number," says Michele Havens, head of U.S. wealth management at BMO. "We ask clients to think about their value and purpose more than their savings."
Work one more year if you don't know what you'll do in retirement: You may know you don't want to work anymore, but if you haven't really thought about what you'll do once you retire, take the time to ponder it. Spend one more year working and map out what retirement will look like for you. Not only the big trips and hobbies, but the day-to-day activities. What does a regular Tuesday look like?
Take your time with the choice
Deciding between 2027 and working one more year doesn't have to be an all-or-nothing choice you make today. Use the coming months to hone your plan, build your confidence and map out what life actually looks like after work. When the financial and emotional pieces align, you'll know it's time.