Are you thinking about retiring, but aren’t sure if it’s the right time yet? While retirement can certainly be an exciting prospect, deciding whether or not it’s time can be difficult.
If you’re not sure when to retire, check out this guide to discover the top signs that you’re ready for retirement.
1. You’re Financially Prepared
Being financially prepared is one of the biggest signs that you’re ready for retirement.
Of course, being financially prepared will mean something different to everyone. The amount of money you need for retirement will depend on the lifestyle you want to live.
Basically, there isn’t a “magic number” you need to hit that will signal you’re ready to retire. Instead, you need to look at your pensions, savings, and Social Security and other assets and determine if this is enough to carry you through the next 30 years or so.
For many people, working just a little bit longer can add 1 to 2 percent to their retirement savings, so keep this in mind before you throw in the towel at your job.
If you’re not sure where you’re at in terms of your finances, we recommend using a retirement planner.
2. You’re Debt Free
Regardless of the number you’re trying to hit in your savings, you should be debt-free before you retire.
Carrying debt into retirement can be a huge burden, as this means you’ll have to worry about past future expenses. While some people maintain car loans and mortgage loans in retirement, it’s best to eliminate high-interest credit card debt, student loans, and any other outstanding loans you have before you retire.
By going into your retirement debt-free, you’ll be able to concentrate your efforts on current and future expenses.
3. You Have Health Insurance
Before you retire, it’s also important to assess your health insurance situation.
Many people get their health insurance through their spouse’s job. If this is the case for you, you’ll need to purchase different health insurance before you retire.
This is why many people wait until they’re 65 to retire, as this is when you can qualify for Medicare.
4. You’ve Hit Full Retirement Age
If you’ve hit the age of 66 or 67 (depending on when you were born), then that’s another sign that you may be ready to retire.
At 66 or 67, you can start collecting Social Security Benefits. Technically, you can start collecting when you’re 62, however, this will reduce your monthly payment by a whopping 25%.
On the other hand, if you wait until you’re 70, then you can receive as much as 132% of what you would have collected at 66 or 67.
5. You Have a Way to Fill Your Time
Retiring isn’t just about being financially ready, it’s also about being psychologically and emotionally ready.
For many people, their work is a huge part of their identity and their co-workers make up a large portion of their social network.
Before you retire, you should have a plan in place of how you’re going to spend your days. Whether it’s taking up a new hobby, volunteering, or watching after your grandkids, having an idea of how you’re going to spend your time will ensure that you stay happy and fulfilled in retirement.
When to Retire: Is it Time?
Now that you’ve read this article on when to retire, you should have a better idea if it’s the right moment for you. If it is, then it’s time to start thinking about where you’re going to retire.
Be sure to check back in with our blog for more retirement tips.