Are You Ready to Retire? 10 Signs to Check

Additional Coverage:

10 Unmistakable Signs It’s Time To Retire (financebuzz.com)

Is Early Retirement a Reality for You? Here’s How to Tell

Retirement might feel like a distant dream for many, but you might be closer than you think! Before you throw in the towel on ever enjoying those golden years, let’s explore some key indicators that could mean your retirement prospects are looking brighter than you imagined.

1. Your Retirement Portfolio is Flexing Its Muscles

Take a moment to tally up all your retirement investments. You might be pleasantly surprised by the healthy state of your savings.

Remember, your retirement portfolio isn’t just that 401(k); it includes stock holdings, savings accounts, other investments, and even the equity in your home. Any asset that can be converted to cash is a potential boost to your retirement fund.

2. You’ve Conquered Your Career Mountains

Have you reached the pinnacle of your professional aspirations? Or perhaps the daily grind no longer ignites that spark of motivation? These moments can signal it’s time to step back and enjoy the fruits of a career from which you’ve already gained so much.

3. You’re Waving Goodbye to Debt

A crucial goal before retirement is to shed that pesky debt. Living on a fixed income means you’ll want to avoid the burden of outstanding payments.

If you still have debt on your balance sheet, now’s the time to tackle it. Prioritize paying off your mortgage, student loans, and especially high-interest credit card debt.

Make a plan to only purchase what you can pay off monthly going forward.

4. You’ve Got a Retirement Plan in Motion

Do you already envision where you’ll live or what adventures you’ll embark on during retirement? Having clear goals in mind now can help you craft a solid plan for when you’re ready to make the leap. Consider factors like the cost of living in your desired location, daily expenses, and those special one-time events like travel.

5. Your Retirement Budget is Ready for Action

Creating a detailed budget as you countdown to retirement is a smart move. Don’t forget to include utility costs, groceries, car payments, and those exciting one-time expenses for vacations or hobbies. A well-crafted budget will help you get comfortable with the financial landscape of your retirement and might even reveal that you’re in better shape to retire now than you thought!

6. You’ve Got Other Income Streams Brewing

Perhaps you’ve cultivated a successful side hustle, or you’re considering a part-time job to stay active in retirement. Exploring ways to supplement your Social Security income now can provide a valuable financial cushion for later.

7. Your Emergency Account is Fully Stocked

A robust emergency fund, separate from your regular checking account, is essential for covering unexpected expenses like car repairs or medical bills. If your emergency account is fully funded, it’s a strong sign you can handle those curveballs on a fixed income.

8. You Qualify for Benefits

Throughout your working life, you’ve contributed to Social Security and Medicare. But do you know if you’re old enough to qualify for these benefits, or how much they’ll provide?

If you haven’t already, create an account on the Social Security Administration’s website by age 60. You can review your earnings history, calculate your potential monthly benefits, and see your contributions.

Holding off on claiming Social Security, if you can, may even lead to a larger check down the line.

9. Your Home is Officially Yours

One of the biggest monthly expenses is often a mortgage payment. Paying it off means one less financial worry eating into your retirement funds.

However, if your mortgage has a low interest rate and your investments are earning a higher return, keeping the mortgage might be a smart financial play. Don’t forget to factor in the mortgage interest deduction on your taxes – a financial advisor can help you weigh this decision.

Pro Tip: If your mortgage payments include escrow for home insurance and property taxes, remember these costs don’t vanish when the mortgage is paid off. Be sure to include them in your estimated retirement budget.

10. You’re Flying Solo (Financially Speaking)

If you’re still footing the bill for college-bound kids or supporting aging parents, retirement might need to wait. Your proposed retirement budget should comfortably cover the expenses for you and your spouse or significant other. Additional financial dependents on a fixed income could lead to future financial strain.

The Bottom Line

So, can you retire early? Possibly!

Take a thorough look at your overall savings and meticulously factor in all monthly costs you’ll face on a fixed income. Consulting with a financial advisor can offer invaluable guidance and provide the peace of mind you need to make informed decisions about your retirement journey.