How do you know it's time to retire?

August 9, 2011: 11:23 AM ET

As more Americans work past 65, the notion of an ideal retirement age has grown murky. Here are a few questions to ask yourself before you take the plunge and head to the golf course.

By Laura Vanderkam, contributor

FORTUNE -- The first wave of Baby Boomers turned 65 earlier this year. Once, that was the official retirement age, the birthday after which you could spend entire Tuesdays on the golf course with no judgment. It was also the age at which people would start to look askance at the office.

Indeed, a broad swath of older workers once faced mandatory retirement age policies, and until this spring, Great Britain had a "Default Retirement Age" (DRA) of 65. Past that, an employer could dismiss an employee simply because she was getting on in years.

But Britain's DRA has now been largely phased out, and social norms are changing. According to the Bureau of Labor Statistics, in the U.S., the labor force participation rate among people aged 65 to 74 rose from 16.1% in 1988 to 25.1% in 2008. To be sure, the increased participation among older workers is at least partly due to financial necessity -- though the increase began during good times, rather than simply spiking during the recent recession. But even if you are financially comfortable, or if you can be flexible with living expenses, this increase in working seniors raises different questions: in the absence of social norms or laws, when is the right time to retire? What are the signs that you should stay, and what are the signs it's time to move on?

The biggest variable, experts say, is how you feel about your current job. "A lot of times, that can be something negative," says Betsy Werley, executive director of the Transitions Network, an organization for women over age 50 who are exploring what's next in their personal and professional lives. "You wake up in the morning and can't stand the thought of going to work."

Then it's definitely time to pick a quit date. If you don't loathe your work, however, then here are three more questions experts recommend asking before penning your resignation letter:

1. Do I have a life outside of my job? "Your work life is a big part of your social ecology," says Mark Miller, who runs the website Retirement Revised.

Even if you don't necessarily like your colleagues, humans are social creatures and need people to talk with on a regular basis. If you don't have a social network outside of your workplace, then you need to build one before you give notice, or else you'll wind up missing the water cooler fast.

2. How will this affect my family? Is your spouse ready to retire, or is he or she already retired? Or perhaps your spouse has no intention of retiring, which can cause tension if you assumed you'd spend all your time together. You may prefer work dinners with clients to eating in a romantic Caribbean restaurant, all alone.

Of course, if your children and grandchildren need time and attention, that can affect the decision as well; few jobs let you take off for eight weeks to care for your grandchildren while your adult child is going through a divorce.

And finally…

3. What else can I see myself doing? "If you have a big list of things you're dying to get to, you're in good shape," says Sydney Lagier, who retired from a venture capital firm in her early 40s, and now pens a blog called Retired Syd. "If you are just going to watch TV you're not going to like it."

People get a big chunk of their identity from work, and in its absence, you need to redefine yourself. How would you identify yourself at a party? If you don't have an answer to that question right now, spend some time coming up with one.

Howard Stone, co-author of Too Young To Retire and a retirement coach, recommends writing a letter to yourself (or a friend or mentor) from the perspective of you, five years from now. In this future scenario, you've created your ideal life. "Write about it as if it's already happened," says Stone.

What would you do with the extra time? Many people have visions of travel and volunteering with causes they care about, but a surprising number these days are also envisioning some form of paid work -- either a part-time job in a new field they've always fantasized about (wine production, working in an independent book store), consulting occasionally in their previous fields, or starting their own businesses.

Whatever it is, try to be as specific as possible, because then, you can "start to work on what needs to be done to get to that ideal life five years from now," says Stone. The more alluring the image is, the stronger the pull will be.

"The ideal time to retire is when the unfinished business in your life begins to feel more important than the work you're doing," he says.

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