At some point we’ll all ask ourselves when’s the earliest we can retire? Is there enough savings put aside? What will I do with all the free time?
There are a few signs that will be able to tell you whether or not you’re ready for retirement. Some of us are closer than others. Here’s the top 5 factors you should take into account before you consider stepping into retirement!
The more debt you have completely paid off before retirement the better. If you have a paid off mortgage, zero loans, credit card balances, and any other debt, you definitely have a good head start going into retirement!
2.Savings Meet Your Goals
Do your savings exceed what your retirement financial goals were? There’s no need to wonder if your ready for retirement if that’s the case. There’s many people who barely have enough put aside and still manage to retire happily. Unless of course, you decided to start an early retirement. In this case, make sure to calculate in those extra years.
3.Healthcare Is Covered
Don’t let healthcare coverage be the factor for whether or not you can retire early! There are still a lot of affordable healthcare options if you aren’t yet eligible for Social Security or Medicare. If you already have good health coverage through your spouse’s plan or through your former employer, you’ve already got a good head start. Another option for those looking to retire early is purchasing private health insurance. See if you can still use your HSA account-do all the research to see what savings can be made with your health care.
4.Your Retirement Budget Is Live-able
Have you been pretty good at practicing staying in your monthly retirement budget? If you haven’t tried this yet, you may be in for a surprise when that time rolls around that you have to. It’s smart and highly recommended to start testing out your fixed monthly income well before you actually are retired.
“Humans do not like change, and it is hard to break old habits once we have become accustomed to them. By ‘road-testing’ your retirement budget, you are essentially teaching yourself to develop daily habits around what you can afford in retirement,” says Mark Hebner, founder and president of Index Fund Advisors, Inc., in Irvine, Calif., and author of “Index Funds: The 12-Step Recovery Program for Active Investors.”
5.You’ve Got Plans & Projects Ready For Retirement
Spending a day here and there relaxing and doing nothing feels great on occasion. But day after day with no plans can lead to an unhappy and depressing retirement. If you haven’t already, start planning out a daily routine, fun hobbies you want to take up, and projects you’d like to finish while you’re retired. Go out and volunteer, incorporate the gym into your schedule a couple times a week or take a long walk every morning. There’s so much you can do to fill your time. Once you have a good plan set up, you’ll feel more confident going into retirement.
Be realistic with yourself, your budget, how your debt looks, and what your game plan is for when you’re retired. You’ll thank yourself later for going over these factors you just read over and making sure you’re well prepared. Meet with a financial professional if you think you’ll need the extra help transitioning into this new and exciting chapter of your life.