You are nearing the average retirement age and each day it becomes closer and closer. The question is, are you ready to retire? Check out these 5 signs you’re ready to retire.
- Your Savings Exceeds Your Retirement Goals: At one time or another, you sat down and made an investment plan so you could retire happily. Now the time has come to see if all your savings has paid off. When calculating the savings you have and if it will be enough for retirement, consider using ‘Rule 25.’ This rule states you should have 25 times the value of your annual expenses.
- All Debts Are Paid Off: When entering retirement, make sure you don’t have any large payments you will have to make. Big expenses such as mortgage, loans, and large credit balances are things you want paid off before you consider retiring. Paying off large bills before retirement will allow your money to go farther so you can enjoy your life after work without worrying about saving for your next large payment.
- You Can Currently Live on Your Retirement Budget: More often than not, when you enter retirement you live off of fixed monthly income that is typically less than when you were working. Before retiring, consider living on your ‘Retirement Budget’ so you can determine if you can live comfortably on your new budget.
- Healthcare Is Covered: Regardless if you are on the verge of retirement of not, healthcare can be very costly. Simple things like blood tests and non-generic prescriptions can make your expenses skyrocket and cause you to not live the retirement you dreamed of. When exploring options, see if you can stay on your employer’s plan, if not your spouses. Does your company offer a Health Savings Account (HSA)? You can use this for tax-free distributions to pay for out-of-pocket medical expenses. If all else fails, sign up for private healthcare, just make sure the monthly cost is included in your ‘Retirement Budget.’
- Have a New Plan or Project for Retirement: Although it may seem like a distant dream now, retirement will be upon you before you know it; and while you might be looking forward spending long days doing nothing, research shows this can lead to an unhappy retirement. Before you retire, brainstorm some of the hobbies you enjoy and/or consider looking for a part-time position to pass the time. Do you like golfing? Replace your weekly meetings with weekly golf outings. Just like you should test-drive your ‘Retirement Budget’, take a week or two off from work and spend your days just as you would in retirement.
Deciding when to retire comes with a lot of considerations, from being healthy and debt-free to living on a budget; make sure you are more than well off before considering the move into retirement. After reviewing these signs and feeling confident about your decision to retire, it is always best to consult a financial professional to make sure you didn’t miss any areas and aren’t in for any surprises when you open the retirements doors.
*Content derived from Investopedia.com
Disclosure: This information is provided as general information and is not intended to be specific financial guidance. Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives.