You’ve probably dreamed of the day when you can finally say you’re retired. While it’s fun to dream about retirement, deciding you’re ready to retire may be more difficult than you had imagined. So, how do you know? We’ve put together a list of signs to help you determine if you’re truly ready to retire.
You’re Financially Prepared
One big milestone on your path to retirement is having the money you’ll need saved. If you’ve been working with an agent, you probably have a pretty good idea of when your savings, retirement accounts and Social Security benefit will generate enough income to retire with confidence. To determine how much you’ll need in retirement, you’ll want to have a good idea of your expenses — housing, food, medical, long-term care, transportation, travel, etc.
You Have a Distribution Plan
Accumulation, or funding your future retirement, has been your focus as you worked, but having a solid distribution plan is essential to live the retirement you’ve dreamed of. Your Farm Bureau agent can help you discuss options and strategies for receiving your funds.
No mortgage — check. No car loan — check. Kids are out of college — check. It’s not to say you’re not ready to retire if you have debt, but eliminating debt can make it easier to retire. If you currently have outstanding debt, look for ways to pay off loans faster. You’ll save yourself extra costs and be on the road to a financially secure future. Eliminating debt can also free up more funds to put in your 401(k), IRA, savings, etc.
You Have Medical Coverage
Medical expenses can quickly add up, especially during retirement. Not planning for healthcare and long-term care costs is a retirement planning mistake you’ll want to avoid. If your medical coverage is through your employer or your spouse’s employer, you’ll need to acquire health insurance outside of an employer before you retire. Some people choose to wait to retire until age 65 when they can qualify for Medicare.
You Know How You’ll Spend Your Time
Your work schedule has been a big part of your life for a long time. Transitioning into retirement can be a big change, especially if you don’t have a plan for how you’ll spend your newfound “free” time. Before you retire, make a list of things you want to do — hobbies, traveling, gardening, spending time with family and friends, working with charities, etc. Having an idea of what you want to do can help with the transition.
You Know How You’ll Claim Social Security
Did you know there are ways you can maximize your Social Security benefit? You can start receiving Social Security benefit payments as early as age 62, but you won’t receive as much as you could. Additionally, if you delay taking your benefit past your full retirement age (66 or 67 depending on when you were born) you could increase your amount per year, up to age 70 (if you were born after 1943). If you wait until 70, you would receive the maximum monthly amount.
Make Moves Now to Prepare for Your Future
A recent poll from The Associated Press and NORC Center for Public Affairs Research found that nearly one-quarter of Americans don’t plan on retiring, according to cbsnews.com. Additionally, 56% of younger adults said they feel unprepared for retirement. If this sounds like you, connect with a Farm Bureau agent to learn how you can make moves now your future self will thank you for.