Not retired yet but in a similar situation to you. You need to treat retirement income as "real income". You put the money aside, so you earned it. You should have a long term financial plan, though. It's often a matter of how aggressive you want to be with your investments and will you be able to ride out those years where the returns are not very good, or do you want to invest conservatively? A qualified financial planner can be of help here.
I'm not a CFP but work with an investment firm. I have the software to do some projections and have enough retirement savings to maintain and exceed my current income level with full time employment. Basically, how much income do you want to draw from your retirement plan annually, how long should the plan last and what rate of return can you reasonably expect with that plan? A CFP will have software that can calculate those things and factor in inflation and also look at tax implications to minimize taxes paid.
In Canada all workers pay into the Canada Pension Plan (CPP) so you also get to draw on that plan at retirement (based on what you paid into it). So for my plan I take into account my retirement savings plan, my CPP benefits and maybe some Old Age Security on top. I then projected that out to when I will be in my late 80's. I expect to need more money at first because my wife and I will want to travel more. Those expenses will go down when we get older. If we live into our 90's, our house is paid for and I have not factored that into retirement income. There will be enough equity there to place us both in a nice retirement village should we live that long.
That's roughly how I worked things out. If you think income will be an issue, maybe go from full time to part time work so you draw less from retirement savings at the start. At those levels the savings should still grow. My manager enjoys the work here so he plans to keep working but to keep reducing his hours. I've been taking a similar approach and taking more time off lately, but I'm fortunate to work for a small company that allows flexibility in my hours.
None of my friends who have retired have said that they wished they had worked longer. They have strong family ties and grand children and keep busy. A few that ended up with too much free time eventually took on part time work to fill the day. All I can say to that is if you plan to work more, make it something you really enjoy. If you are enjoying what you do and the people you interact with, no harm in continuing. Keeping busy will keep you young.
Some of my friends retired from factory and government jobs, so no surprise that they wanted out. If you are in a private practice, your situation could be very different. I know a few lawyers that worked beyond retirement age simply because they enjoyed going into the office daily.
As to knowing when to retire, if you are financially set then it comes down to your mental state or gut instinct. I was initially ready to work beyond 65 but the last 2 or 3 years ended up being very stressful. My mind set has changed and I am getting things in place so that I can transition out of work. I have a ton of projects on the back burner so no concerns about keeping busy. If you don't know what you will do with your spare time, then work will keep you busy. If you have a growing list of things you want to do, then you will eventually realize that it's time for change. Well, I hope I didn't ramble too much and that there is a pinch of wisdom in there.
