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Vettel won the F1 title from 2010-13 with the Red Bull team. His last race victory came with Ferrari in 2019.
This season with Aston Martin, he has been largely unsuccessful with a best finish of sixth place.
“The decision to retire has been a difficult one for me to take, and I have spent a lot of time thinking about it,” Vettel said. “At the end of the year I want to take some more time to reflect on what I will focus on next; it is very clear to me that, being a father, I want to spend more time with my family.”