For some the sign to retire is like the bat signal…you just can’t miss it. For others it can be hard to determine if the time is right to retire. Here are some tell tail signs that you are in fact ready to retire!
Your savings can withstand a big loss – Everyone’s standard of “living well” in retirement is different from the next person. Fidelity Investments recommends having at least eight times your pre-retirement income by age 67 to safeguard a secure retirement. If you are looking to retire earlier you will want that number to be larger. Retirement savings this size usually can withstand any kind of unexpected expense.
Your debts are paid off or nearly paid off – Interest on debt can be a big drain on retirement savings over a period of time. That is why it is very imperative that your debts are paid off before you retire or at least have them paid off within the first 6 months of your retirement. Debts over time add up in interest fees alone. Working a few years longer to pay off huge debts (credit cards, kid’s college) can save you money in the long run.
Your kids are financially independent – Kids are wonderful, but let’s face it kids are also very expensive. If you kids face any kind of money troubles you will be the first one they turn to. If you kids are financially independent this is a good sign for your retirement. If you kids are not yet there for financial independence and you are looking to retire, it may be a topic to discuss with them. Share with them your plans in your retirement and that your retirement budget cannot help them in the future. The push for them to become financially independent will help you and them in the future.
You are ready to quit work – There can be a time in your working career where you just can no longer work. It can be a physical feeling, mental feeling or an overall feeling that you just feel ready to quit. It is very important to recognize the signs of being ready to retire because working without a sense of accomplishment can lead to depression and other ailments.
You have reliable health insurance coverage – The biggest cost to retiree’s nest egg is health care costs. According to a report from AARP’s Public Policy Institute and from Georgetown University people over the age of 65 are expected to spend 18 percent of their household income on health care. That number is only expected to grow with the rising costs of nursing homes and in-home health care.
You have had a test run with your budget for retirement – One of the newest trends in retirement is testing driving your retirement plan. Essentially for up to six months you test run your budget for retirement. You can determine based on your financial plan if your retirement can really live up to what you expect it to be. The test run retirement has gained in popularity across the nation for baby boomers who are not completely sure they can in fact retire.
If you are unsure of your retirement budget or already know that you are in trouble of retiring when you expect to retire, a reverse mortgage can make retirement for you a possibility. A reverse mortgage is a financial tool for people 62 and older who own their home, have sufficient equity in their home. To learn more about the reverse mortgage process visit the One Reverse Easy 4 Step Process.
Kristen Curzytek is a writer for Retiring Wise. Give us a call at (800) 401-8114 to talk to one of our licensed professionals. They can discuss your financial situation with you and determine if a reverse mortgage makes sense for you and your financial goals.