Are you mentally prepared to retire?

Tuesday - 8/27/2013, 7:40am EDT

Tammy Flanagan on In Depth with Francis Rose.

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With baby boomers approaching retirement age, many are curious as to why the generation continues to stay in the workforce.

Tammy Flanagan, senior benefits director at the National Institute of Transition Planning, knows some federal employees who were in their jobs for more than 50 years before retiring.

"I kept wondering, what's keeping them in the government?" Flanagan said on In Depth with Francis Rose. "Clearly, they have enough service that they can afford to retire, so it must be the mental side of it that's keeping a lot of people in the workforce."

A study in MetLife's latest report, "The Oldest Boomers: Healthy, Retiring Rapidly and Collecting Social Security," asked boomers why they expected to retire later than they had to. Among respondents, 32 percent said they enjoy working and want to stay active.

"For some people, that love of what they do is where they get their satisfaction," Flanagan said. "There's almost an equal amount of emphasis on the mental preparation for retirement as there is on the financial."

Flanagan said the most common reason people cited for retiring was a desire and readiness to do so. But a number of other factors also influenced why some boomers retired. In 2012, 17 percent said they retired for health-related reasons, and 10 percent said they were laid off or unable to find work.

Primary reason for retirement (MetLife report)

"If somebody retires before they feel ready or if they feel some pressure to retire, I don't think the whole experience starts out as pleasant," Flanagan said. "[But] we always have to be ready for the unexpected in life and be ready to take that curveball."

Even if employees feel they may be mentally ready to retire, Flanagan said they should still "crunch the numbers" to ensure they are financially prepared. Only 8 percent of surveyed retirees said they retired later than planned. But among those, 30 percent cited income needs as the reason.

"I think if they take a closer look at the numbers, they will realize that their retirement benefits will replace most, if not all, of their net income," Flanagan said. Retirees no longer have to pay Social Security taxes or contribute to the Thrift Savings Plan. In addition, they pay less income tax due to a lower income. "All of those deductions from their paycheck ... makes retirement something where you don't necessarily have to retire on your full salary."

Although most retirees cited lower disposable income, very few noted a decrease in their standard of living. One retiree said in the report, "My standard of living increased in retirement because I don't have the expenses of going to work, and with retirement, my net income is higher than when I was working."

Flanagan said boomers can take the MetLife Retirement Income Quiz to find out how much money they will need to retire comfortably.

Employees who prepared both financially and mentally before retirement seem to be enjoying their new lifestyle — 93 percent of retirees said they either liked retirement a lot or somewhat.

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