Ready to Retire? How to Know for SureSubmitted by Latitudes Financial Strategies on October 7th, 2020
Retirement is an exciting time for many, and the reward for years of hard work. While there is no set age for retirement, it is important to be prepared before you make the leap, so that you enjoy your retirement and financial stability during it. If you are considering retiring soon, below are some quick considerations to make to know for sure.
Have You Secured Healthcare Coverage?
One of the largest expenses during retirement could end up being your healthcare expenses, especially if you do not have a healthcare plan in place when you retire. While you will become eligible for Medicare at the age of 65, if you retire before then, you will want to find coverage to bridge the gap between the time your current coverage ends and Medicare coverage begins. You may want to look at the cost of private insurance, see if you are eligible to be on a spouse's plan, or COBRA your current plan for a period of time after your employment ends. Always be sure to have some kind of medical coverage, even if it has a high deductible, as lack of coverage may lead to significant expenses.
Have You Eliminated Most of Your Debt?
Going into retirement with major debt may lead to you burning through your savings quicker than you anticipated. If you have stayed on top of your debt and have paid off your mortgage, lines of credit, large loans, and high credit card balances, you are likely in a good position to consider retirement.
Do You Have Enough Money Saved?
When planning for retirement, you likely had a retirement goal, which would provide you with at least roughly 75% of your working income each month or more. To see if you are in a position to retire, check your savings and investments to make sure that you have met or exceeded the amount that you had hoped to save. In addition to making sure you have enough savings, you also should make sure that you will have access to the savings when you need it. For many qualified retirement plans, that means being at least 59 1/2 years of age to withdraw without penalty. If you plan to retire before that, make sure you have other forms of savings that will get you through until then.
If you answer yes to all of the questions above, you may be in a good position to retire. If not, it may work in your favor to continue to work for a few more years to become closer to your final goal.
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