Is now the right time to retire?

Posted: 11 am ET

Good timing can make a big difference in how financially comfortable you’ll be in retirement, and by at least one system of measurement, now may be the right time for some folks to take the plunge.

The best time to retire is when the economy is at the bottom of the trough, says Jimmy Williams, CPA, personal financial specialist and member of the National Credentialing Committee with the American Institute of Certified Public Accountants, or AICPA.

The economy hit that bottom in the third quarter of 2014, according to the AICPA. We are now showing a positive uptick, Williams says.

Get your golf clubs ready.

The AICPA releases its Personal Financial Satisfaction Index four times a year. The most recent one, released last week, showed the economy is improving in key ways.

• AICPA’s proprietary stock index, comprised of the 750 largest companies trading on the U.S. stock market, is at its all-time high, adjusted for inflation. It’s up 14 percent year over year and up 10 percent above the previous quarter. (The index doesn’t include foreign stocks trading on U.S. exchanges, mutual funds or exchange-traded funds.)

• Real home equity is up 14 percent compared to last year. Almost all the increase, Williams says, is due to rising market value, not changes in the value of outstanding mortgages.
• Non-farm job openings have increased 24 percent compared to this time last year.
• The outlook of certified public accountants is 19 percent higher than it was a year ago. This measures a variety of attitudes held by CPAs engaged in business.

No more pain?

The AICPA also measures economic pain, and the Pain Index is down. Over the last year, there has been a 7-point decline in inflation, a 4-point decline in loan delinquencies, and a 3-point fall in underemployment. Taxes were flat.

We think that things will continue to improve over the next few years and that people are going to have more opportunities to grow their money and get more mileage out of their retirement savings than they would have in the declining economy that we saw during previous years, Williams says.

Williams, who is president of Compass Capital Management, a wealth management firm in Tulsa, Oklahoma, says no matter what the economy is like, he never intends to retire completely. But one of these days he hopes to travel more, play a lot more golf and read my Wall Street Journal at my desk.

As part of his State of the Union address, President Obama offered two ideas for improving the State of Retirees .

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