Deciding when the time is right to retire can be difficult, but thankfully there are some common
benchmarks and indicators that can help you determine that yes, you’re finally ready for your post-work
life.
An Investopedia article, 6 Signs That You’re Really Ready to Retire presents some helpful details.
Your Full Retirement Age
There are six signs that you’re ready to head into retirement, the first of which is that you’ve reached
your full retirement age. If you were born between 1943 and 1954, your full Social Security retirement
age is 66. If you were born after 1959, you must wait until you’re 67 to reach your full retirement age.
Between those dates, your full retirement age is 66 and some months.
Also bear in mind that while you can begin receiving Social Security as soon as age 62, if you do so, you
may be missing out on a significant amount of money because your monthly payment is markedly higher
if you wait until you reach your full retirement age.
How big is that difference? If you begin receiving Social Security at age 62, your monthly payment is
permanently reduced by 25 percent.
While we just discussed that you may begin receiving Social Security before your full retirement age, the
fact is you can also work beyond your full retirement age and then receive a bigger future monthly
benefit for your efforts. Social Security permits you to delay filing until you’re 70 and by waiting until
that momentous birthday, you’ll receive as much as 132 percent of the monthly benefit you would have
received at your full retirement age.
The Impact of Debt
Being debt free may be yet another indicator that you’re ready to call it a career. If you no longer have a
mortgage on the house and don’t have any high interest credit card debt nipping at your heels, you’ve
put yourself on solid financial ground.
Conversely, if you have outstanding balances on a home or vehicle, or you have a lot of credit card debt,
you may want to consider moving your retirement date ahead a bit into the future to give yourself a
longer runway to get out from under that debt.
Taking Care of Yourself First
No longer supporting your parents or your children is another sign that you may be ready for
retirement. After all, if your kids have reached adulthood and are out in the world earning incomes of
their own, it will likely make your financial path during retirement a little smoother.
But if you’re still offering financial support to your kids or parents, even if it’s a modest amount of
money on an irregular basis, you may need to postpone your retirement until you’re confident that
you’ll no longer have to provide them financial support.
Carefully assess your financial obligations to family members and be honest about who may need your
financial help in the coming years.
Build a Budget
Another good sign that your retirement has finally arrived is crafting a complete and thorough budget. A
budget should be built around the monthly expenses that you know will exist month-to-month: housing,
groceries, utilities, and gas. After that, you can add in some of your wants, which often include items like
travel, entertainment, shopping, and dining out. Once those monthly needs and wants have both been
calculated, you can determine how much income you’ll need to cover everything.
A Shared Vision
If you and your spouse share similar retirement goals, it may be yet another indicator that you’re ready
to enter the next stage of your lives. Retiring as a team requires frank conversations, careful planning,
and plenty of compromise. Do you both agree that your financial picture is solid? Do you both feel
prepared to manage the social and emotional changes that come with retirement?
If one spouse retires while the other one is still working, the retiring spouse needs to be prepared for a
retirement that will initially be a solo adventure. Hobbies and a solid social circle may be essential.
Sources
https://www.investopedia.com/articles/personal-finance/011916/6-signs-you-are-ok-retire.aspAdvisory services offered through SRS Wealth Management, LLC, a Registered Investment Advisor in the State of California. Insurance products and services are offered through Successful Solutions, LLC, (License#: 0D73873) an affiliated company. SRS Wealth Management, LLC and Successful Solutions, LLC are not affiliated with or endorsed by the Social Security Administration or any government agency.
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