Big life decisions are hard enough to make on their own, without having to consider budgets and other important factors. Retirement is a big accomplishment, and making sure you have all your financial plans in order is a huge part of how successful your retirement will end up.
Another part of deciding whether you’re ready to retire is your emotional and psychological health needs. Read below to discover five sure signs you might just be ready to make the retirement leap.
1. You’ve Considered Medical Care
The cost of healthcare for every American will continue to rise. So as we age, we will need more medical care than we did years earlier. You have to consider things like palliative care or nursing homes too. These services may cost more than you realize, with figures from the U.S. Department of Health and Human Services suggesting at least $6400 a month.
Even Medicare can become more complicated than you think, with parts A and B, and the Advantage Plan to understand. These coverages are designed to you offset out of pocket expenses. Yet you still have to figure in the costs of your premiums and deductibles, and with some plans, you may also have to pay for regular checkups and wellness visits.
This is one of the hardest parts of planning for retirement because you don’t know what the costs will amount to. Medical expenses are often unexpected and one event can change the careful planning you’ve done for the coming years. Before you retire, this stage of your medical care is important to consider and understand to ensure you’re prepared.
2. You Understand Social Security
Social Security benefits are something you pay into your whole life, from the first job you have. When you retire, you’re able to draw on those benefits. Yet in 1983, Congress made some amendments, one of which was increasing the full retirement age.
The full retirement age depends on the year you were born. The Social Security Administration has a handy calculator to help you figure out what your full retirement age (FRA) is.
You can draw from your benefits before you reach your FRA, but you’ll incur a penalty (somewhere between 25 and 30%, depending on how early you start). Likewise, you can wait to draw until after your FRA and receive an increase instead.
Understanding how the Social Security system works is important to know before you retire. There are more tips here, including common questions you may have. Yet the bottom line is that factoring in this part of your income is a necessary part of careful retirement planning.
3. You’ve Planned Carefully
Your medical expenses and Social Security planning are a big part of your retirement finances. The rest of your finances also have to be buttoned up. The sooner you started saving, the more your IRA or 401k had a chance to grow. Hopefully, creating an income amount that will keep you living at the same standard you’re used to well into your retirement?
As you work with your financial adviser to figure out your monthly expenses and predict how much you’ll need, consider emergencies, too. Create plans for unforeseen problems like stock market crashes or a spouse’s passing. These life-changing events can hit you the hardest, but they don’t have to ruin your financial plans if you’ve considered alternatives and options ahead of time.
4. Your Friendships Are Ready for You to Retire
Having a support system in place is also a huge part of avoiding isolation during retirement. When you no longer go to a job every day, you have to work a lot harder to see people and maintain social activities. Make sure you have steady friendships and quality relationships that will support you through the dearth of face-to-face contact.
A job can make up a large part of your identity, so when you no longer work that job, you may feel like you’re losing a part of yourself. Friends help you remember who you are outside of your work. They give you a connection to that piece of you that you may have forgotten about during your career blazing years.
If you find that you only socialize with coworkers, you’ll need to work on developing a new community to lean to when you retire. Chances are you won’t see your work-related friends as much anymore. It may even feel like they’re moving on without you if they’re still going to work every day. So find a group of people with commonalities outside of a job to help you make the transition easier.
5. You Won’t Get Bored
Sometimes when people leave their careers, it sends them into depression because they haven’t planned for something else to do or pursue. Retirement sounds nice, but it can be somewhat boring if you don’t have a hobby or a plan for how to spend your days. The psychological effects of losing a daily purpose and having to find another can be challenging if you haven’t worked out a new routine or plan of action.
Some people volunteer in their communities, choosing to spend time with children or animals that need companions. Some visit their grandchildren and families more often, with more time available to cheer them on in activities like sporting events, plays, and extracurriculars.
Still, others look forward to the days when they’ll spend more time traveling abroad and seeing exotic places they’ve only dreamed of. However you choose to spend your days during your retirement years, you have to make sure you’re ready to take on a new type of activity and leave your old work mentality behind. This is just as important as the financial planning pieces mentioned above.
Ready to Retire: The Best Years
When the check marks are in place for these five signs above, you’ll know you’re ready to retire. So start planning for financial pieces like medical care and emergency expenses, as well as everyday costs.
And equally important, make sure to plan for your emotional and psychological needs after retirement as well.
For help with all of your planning retirement needs, contact us to schedule a free consultation today.