Retirement Vs. Resignation: Which Is Better?

There is a big difference between retirement and resignation. However, both involve leaving your place of work. If you choose to retire, you may be entitled to some social benefits such as pension and healthcare, which can typically vary significantly with organizations. In addition, you need to have attained a certain age or have served for a specific duration to retire. On the other hand, to resign means you voluntarily quit your job, and as a result, you're not entitled to the same benefits as a retiree.

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What is Retirement

If you choose to retire, it means you are leaving your job and will no longer be a full-time employee of your former employer. Typically, your age and the time you've worked in the organization may dictate your retirement. Companies have a retirement age for their employees; when you've attained this age, you are free to retire. However, if, for instance, you've suffered an injury and cannot perform your duties as you should, you may also be required to retire.

You must write a resignation letter and complete a formal retirement application. If you've worked in the organization for a long time, giving the company some notice before you retire is a good idea. After retirement, you are entitled to social benefits like insurance and healthcare for a specific period. You will also be entitled to the money you saved during your career as a pension.

Your retirement eligibility depends on different factors that can vary from one company to another. People plan for retirement years in advance, and companies have policies you need to initiate in advance, which could be several months before the retirement date.

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Process of Retirement

You need to follow specific steps in your retirement process, which can vary from company to company. However, the general process would take the following format.

1. Verbally inform your boss about your retirement.

2. Make a written letter to your boss and copy the same to the company's human resource department.

3. Inform your coworkers about your retirement

4. Share your plans to retire with your family, friends, and clients

5. Share the same information on your social media

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Contents of the Retirement Letter

A retirement letter is a formal notice of your retirement and should include details like the retirement date and personal information. Remember to put your letter in a cheerful voice, which should be short and formal. Having only three paragraphs is ideal because the only purpose of the letter is to announce your retirement. Have a short part in the letter where you express gratitude or thank your colleagues and the company.

• Paragraph 1- About your retirement date
• Paragraph 2 - Highlight your career and express gratitude
• Paragraph 3 – Express your gratitude or thank your coworkers and the company for the support they gave you and what you're looking forward to in your retirement

The essential point is to formally inform your boss and the HR department about your retirement plans. You can have your retirement party if you choose to celebrate  

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What is Resignation

Resignation means you've opted to leave your job voluntarily. The reason for leaving could be that you have found a better job or don't like the company. Alternatively, maybe you want to take a break from working. Depending on your situation, resignation could be temporary or permanent. For example, some may resign from their job to take a year off, only to decide they do not want to return to work. Therefore, you can take a temporary resignation, which extends to a permanent one.

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Process of Resignation

It is a straightforward process if you decide to resign from your job. Most companies will require you to write a signed resignation letter and forward it to your employer. Typically, people give notice in their resignation letters that range between two weeks and one month.

From employee experience, you need to discuss with your financial advisor the drawbacks, such as losing health insurance. You need to ask yourself if it's the right decision to resign if you do not have any other source of income. Remember you still have to pay all the bills. It is critical to remember that without health insurance, life can be challenging.

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Which One is Better

When considering retirement vs resignation, both possibilities involve leaving your job; however, there are some benefits you're entitled to get when you retire instead of resigning. If you've reached retirement age, the best option would be to retire instead of resigning.

Most people who have attained retirement age often choose to retire to enjoy the benefits that come with retirement. However, if you resign, even if you have reached retirement age, you will not be eligible for benefits such as pension benefits or health insurance.

You need to assess your situation and decide the best option for your case. A financial advisor will guide you to make an informed decision.

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After Retirement

After retirement, most people take up part-time jobs. Retirees are often healthy and can work; some may choose volunteer work. Most people want to take time to relax and get part-time jobs or casual work after some time, often after several months. You can also consider working from home because there are many jobs you can do remotely working from home.

If you choose to retire due to disability, finding work that suits your pace and abilities is still possible. Finding part-time work after retirement can help supplement your income so that you don't have to use much of your savings immediately. Additionally, it's a great way to have something that occupies your time.

Key Takeaways

Retirement and resignation are often options that come to mind for anyone at one point in time, and both involve quitting your job. You will not get social benefits like health insurance if you choose to resign. However, if you choose to retire, you will enjoy these benefits.

Additionally, you have to assess your situation and use the services of a financial advisor to decide which option best suits your situation. Whether you retire or resign is up to you and depends on your unique situation.