The choice of when to retire is a big decision, and the more responsibility you have at work, the harder it may be to make the choice to walk away. You may be worried about your team’s ability to carry on without you. If you are a business owner, retirement could bring with it complicated questions related to succession planning. So how do you know when and how to tell your company you’re retiring?
Why Announce Your Retirement Ahead of Time?
Most professionals plan to retire eventually. For many, retirement is the hard-earned reward at the end of a long and fruitful career. But once you see the end in sight, knowing how to reach it can be challenging.
It’s professional courtesy to give your company, and your employees, advance notice when you decide to retire. Many employers only require 30 days’ notice for retirement. However, it is wise to start the process far sooner. Even non-management employees should consider giving at least six-months of notice to protect their professional reputation and ensure a smooth transition.
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For many modern professionals, retirement from the company doesn’t necessarily mean coming to a full stop at their work. You may want to continue in a more limited role as a consultant or an independent contractor handling certain aspects of your work on your own terms. Giving your company – and your top clients – advanced notice about your retirement can help you maintain the professional relationships you need to continue to participate in the career you loved, even after you are no longer working 9-5.
How Early Should You Tell Your Company You’re Retiring?
The higher you are in the corporate structure, the more your retirement can affect the business. Even if you don’t have an exact date in mind, letting the company’s leadership know you are heading toward the sunset of your career can encourage them to plan for what happens after you are gone. Executives and business owners may want to start discussing their retirement up to five years before they plan to step away. Some start even earlier.
A thoughtful succession plan takes time to build. Your company will need time to establish the corporate vision and your role in executing it. Telling your company you’re retiring early means that you can have a hand in those decisions, shaping the future and ensuring a healthy transition. You can help identify potential successors and develop a transition strategy that will maintain the work you’ve done to make your team as good as it can be.
What to Consider Before Telling Your Company You’re Retiring
Advance notice is important, but that doesn’t mean your company should be the first to know that you are considering retiring. These kinds of decisions should be made carefully, and with the help of professionals, not to mention your spouse. In deciding when to retire be sure to consider:
- Your Retirement Goals: Retirement looks different to different people. Will you be caring for your grandchildren or other relatives? Do you want to travel? Are you planning to pick up a second career or start a hobby business? You may want to work with a coach to create a plan and set goals to make your retirement fulfilling.
- Your Financial Needs: Retirementmeans a dramatic shift in your financial situation, from growing your nest egg to living off it. Speak with your financial advisor or someone at your bank to see if you have enough pension, retirement assets, and savings to fund the kind of retirement you want to live.
- Your Health Care: For many, the choice of when to retire can hinge on when they become eligible for certain government or employer-provided healthcare options. You should make sure you have insurance coverage and have spoken to someone about when and how to enroll for Medicare before deciding on a retirement date.
- Your Business Benchmarks: It is also wise to speak with someone in your company’s Human Resources department (or your union representative if you are in a union) about any benchmarks or anniversaries that may affect your retirement plans. For example, your pension interests or stock portfolio may not be fully vested, or you may be entitled to an additional bonus or benefit if you reach a five- or ten-year mark. There may also be project goals you want to hit before walking away from your work. Choosing to delay retirement until you hit those business benchmarks may be better for you in the long run.
How to Tell Your Company You’re Retiring
Once you have done your research and have made the decision to retire, you have to tell someone at the company. It is often best to start with your supervisors. They understand your role in the company best, and may be in a position to offer you part-time work, a consulting contract, or other ways to continue to serve the company once you have retired. Even if you decide to decline the extra work, it can help to know the options available to you.
However, at some point you will have to make it office, and that means putting something in writing. You should announce your retirement in a letter to your supervisor and the appropriate HR personnel. You should also keep a copy for your own records. This letter should be clear about when and how you plan to retire, but it can also give you an opportunity to express your appreciation for the company, say what you have enjoyed about your work, and let your coworkers know what comes next for you after you leave the company.
Knowing when and how to tell your company you’re retiring takes a certain amount of professional finesse. Consider working with a business coach to identify your retirement goals, plan the financial aspects of your transition, manage the interpersonal aspects, and prepare a written announcement. Doing so will make the transition to retirement easier for you and your company.
David Stanislaw is an organizational development specialist with over 25 years’ experience helping executives and business leaders create and execute succession plans. Contact us today to meet with David.
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