According to Gallup’s 2022 research, employee stress-levels are at an all-time high.
In order to prevent complete burnout, you may be considering whether to retire or resign from your current position.
Both retirement and resignation are significant life changes that can be downright scary, so it’s crucial to weigh your options carefully before making a decision.
So which is the right choice for you?
In this article, we will explore the difference between retirement and resignation, and cover key factors to consider when making the decision to retire or resign.
The Difference Between Retirement and Resignation
While the two may seem similar, retirement and resignation are two very different things.
Retirement is when you stop working because you’ve reached the age where you’re eligible to receive benefits like Social Security or Medicare.
Resignation, on the other hand, is when you voluntarily leave your job because you’re no longer happy with it or because you want to pursue something else (kind of like when you hear the term “quitting a job”).
- Retirement is usually a permanent decision to leave the workforce (although you can continue working after retirement)
- Resignation is usually a decision to switch to a different job
Now that you know the difference between retirement and resignation, let’s take a closer look at the pros and cons of each.
Is It Better to Resign or Retire?
Without the clarity, it may cause some retirement anxiety, and you may choose to postpone your retirement date and focus or resigning from your less-than-ideal job in the meantime.
Either way, there are some key factors to look into, starting with deciding if retirement is right for you.
When to Retire?
It’s a question that plagues almost every worker at some point in their career: when is the right time to retire?
The age at which you retire is often based on factors including your age, financial security, health, and personal goals.
For instance, depending on the country, the average retirement age may be sooner than the official retirement age and vice versa.
Beyond age, though, there’s emotional readiness to consider.
For some people, retiree life is a dream come true. They can finally enjoy all the activities they never had time for while working. Others find that retirement is a difficult adjustment and even experience some pre-retirement anxiety.
But in general, these four signs are an indicator you’re ready to retire:
- You’re emotionally drained
- Your health is declining
- You’re financially prepared
- You don’t identify with your job
But if you’re still on the fence about whether to retire or keep working, consider the following pros and cons of retiring.
Benefits of Retiring
- The freedom and time to pursue your interests — one of the great things about retired life is that you finally have the time to do all the things you love
- Improved mental and physical health — according to a meta-analysis of research, retirement generally positively impacts your health as you can focus on self-care
- Social security and lower taxes — in the US, retirees are eligible for social security benefits, and in many cases, retiree income is taxed at a lower rate than earned income
Drawbacks of Retiring
- Reduced income — unless you have a good pension plan or savings, you’ll likely have to downsize your lifestyle significantly
- Health insurance costs — when you retire, you’re also responsible for sourcing all your own health insurance costs
- Reduced social interaction — research indicates that you may lose some social ties during your transition into retirement
- Loss of structure — after the honeymoon stage of having no set schedule wears off, many retirees find they miss the structure of a workday
When to Resign?
While several people choose to retire when they reach a certain age, several others find that they still have plenty of energy and enthusiasm for work (whether it’s in the same career field or something totally different).
If you fall in the latter category, but your current job is no longer fulfilling, then resigning may be the best option.
Not to mention, it’s a pretty common move when you consider the temperament of the recent Great Resignation, where 48 million quit their jobs in 2021 in the US alone, the top reasons being:
- Toxic corporate culture
- Job insecurity and reorganization
- High levels of innovation
Reasons for the Great Resignation aside, here are a few key signs that it may be time to resign and move on to another job. You:
- No longer feel challenged or fulfilled by your job
- Find yourself seeking a new position
- Do not get along with your boss or colleagues
- Don’t feel appreciated
- Feel like you’re no longer learning anything new
- Are consistently unhappy going to work each day
If any of the above resonates with you, then it may be time to hand in your notice. Ultimately, if you’ve hit a brick wall, and no matter how hard you try, you can’t seem to get past it, it’s a big sign to resign from your current role and try something new.
Of course, it’s worth taking the time to evaluate your decision. More than 40% of employees regret their decision to quit, and about 20% returned to their previous jobs, and more are considering it.
Also, a gentle remember that quitting is not failing; it’s just recognizing that something isn’t working and you’re ready to move on to something better. After all, you’re designed to grow at every life stage — transitioning out of your main career is no different.
Benefits of Resigning
- A new challenge — if you’re no longer challenged by your job, then resigning can be an opportunity to seek out a new challenge elsewhere
- A less stressful role — if you’ve been struggling to stay on top of your duties (or your heart’s just not in it), a new job can drop a lot of that heavy stress
- A chance to explore — there’s nothing like giving yourself the chance to experiment, try new things, and connect with yourself again in a totally new environment and role; retirement is about growing, and discovering your new interests, passions, and purpose
Drawbacks of Resigning
- Financial instability — resigning without having another job lined up may put you in a difficult financial situation. Make sure you have a solid plan in place before you make the decision to leave your current position.
- Burning bridges — when you resign, ideally you do so gracefully and professionally without burning any bridges, as you never know when you may need to rely on your network in the future.
- Inconvenience for others — quitting without notice may cause inconvenience or hardship for your employer or colleagues. Try to give them as much notice as possible so they can make appropriate arrangements.
- It takes longer to find a new job — according to a 2012 report by the U.S. Government Accountability Office, over 55s take longer to find a new job
Should You Quit or Retire?
So, if you’re deciding whether you should retire or resign, we’ve outlined the key differences between retirement and resignation in order to help you make the best decision.
To sum up:
- Retirement is a decision to leave the workforce permanently. Resignation is a decision to leave a specific job or employer.
- If you’re considering retirement, consider both your finances and your health. If you’re thinking the resignation route, be sure to factor in your career goals and job satisfaction.
Before you make a final decision on whether to retire or resign, answer these seven key retirement questions to ensure you’re ready. And whichever choice you make, with some proper planning (beyond just financial), the transition can be much smoother.
P.S. We help people make this important transition into a meaningful retirement every day. Feel free to check out our signature Rewire My Retirement program and join other inspiring older adults who are filling their encore years with excitement, passion, and purpose.