How Do I Know When It’s Time to Retire

How Do I Know When It’s Time to Retire

Wondering when it’s an appropriate time to retire? Let’s look at some of the common indicators that you may be ready to leave work for good. An Investopedia article, 6 Signs That You’re Really Ready to Retire, has some terrific insights into this important subject.

Have you reached your full retirement age?

The first sign you may be ready to retire is that you’ve hit your full Social Security retirement age. If you were born between 1943 and 1954, your full Social Security retirement age is 66. If you were born any time after 1959, you’ll have to work until you hit 67.

Between those dates, your full retirement age is 66 and some months.

And while you can begin collecting Social Security as early as age 62, by doing so you’re leaving some money on the table because your monthly benefit is significantly higher if you wait until your full retirement age.

Just how big a difference are we talking about? If you begin taking Social Security when you turn 62, your monthly payment is reduced by 25%.

Are you debt free?

If you’re debt free, that may be another sign you’re ready to trade work for retirement. If the house is paid off and you don’t have credit card debt hanging over your head, you’ve put yourself in position.

Remember, for many people, retirement means living on a fixed income, so a large mortgage or a pricey car payment can squeeze your finances to the point that your retirement is less enjoyable. Also, debt can make it harder to deal with emergency spending.

Where is your money going?

Another indicator that you may be ready to retire is if you’re no longer supporting either your kids or your parents. If your kids are out of the house and enjoying careers — and income

— of their own, it may make your post-retirement financial life much easier.

But if you’re still supporting kids or even providing them with a little bit of financial help on a regular basis, you may want to consider delaying retirement until you know you’ll no longer have to help them. The story may be much the same if you’re providing financial help to your elderly parents.

And, as the article makes plain, supporting your parents and kids is becoming more expensive all the time thanks to the soaring costs of college and housing. If you’re taking care of other people, it’s going to be very hard to downsize and minimize your expenses in the way that many retirement strategies may call for.

Do you have a budget?

The next indicator that you’re ready to retire is completing a thorough retirement budget. On

the one hand, completing a retirement budget may sound overly simplistic, but a surprising number of people try to take the retirement plunge without really understanding how much money they’ll need each month to cover their bills and enjoy themselves.

Your budget should be crafted around monthly expenses you know will be constant: housing, gas, groceries and utilities. From there, you can begin to include your wants, which are typically things like travel, entertainment, restaurants and shopping. Once you’ve calculated your monthly needs and wants together, you can begin determining if you’ll have the income to cover everything.


Advisory services offered through Successful Retirement Solutions, 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. Successful Retirement Solutions, LLC and Successful Solutions, LLC are not affiliated with or endorsed by the Social Security Administration or any government agency.