Are You Ready to Retire?

You’ve spent years planning for retirement, with an end goal in mind. Maybe you plan to move to a sunny retirement community, or you can’t wait to spend more time with the grandchildren. Whatever your plans, it’s understandable that you’re anxious to get there. But before you retire, it’s important to take some time to assess whether or not you’re financially ready. After all, retirement is not only about reaching a certain age or having a particular amount of money in the bank. Be sure to consider these factors:

How much debt do you carry? Aside from your usual living expenses, be sure to factor in your debt load to your budget. It might be worthwhile to continue working just a bit longer, and pay down credit cards and other debt, so that you can really enjoy your retirement without worrying about all of these extra bills.

What about other financial obligations? Don’t forget about college tuition for kids or grandkids, taking care of your own aging parents, or other financial considerations for the future. Later you may wish you’d saved a bit more to cover unexpected expenses, even if they are sometimes voluntary.

Have you planned for medical expenses? You may envision a retirement filled with leisure activities and travel, but none of us should gamble on good health forever. Your retirement plans should include a provision for long-term nursing care at some point, just in case. Also, don’t forget the rising cost of healthcare and prescriptions in general, and fully investigate your Medicare options.

Are you depending upon market growth? Market conditions can be unpredictable, so be certain you can live off of modest growth of your assets rather than counting on rapid growth. In fact, switching to a more conservative investment strategy at retirement time is generally the recommended way to go.

Are you counting on Social Security? Social Security should be viewed as a supplement to, not the foundation of, your retirement income. Also remember that waiting until full retirement age means a larger monthly check for the rest of your life. For many retirees, it’s worth working a few more years in order to guarantee that larger check. Talk to your insurance and/or financial advisor about the pros and cons of retiring at age 62 versus full retirement age.

13410 – 2014/5/15