Retirement is definitely appealing, especially if you can get out early. Gone are the days worrying about work, but also gone are the steady paychecks and the contributions to your retirement savings. So, how can you be sure that you’re ready to have the comfortable retirement you yearn for?
No More Debt
Large debt payments quickly eat into retirement savings. If all your debt is paid off, you won’t have to worry about it shrinking your wealth. It also allows you to enjoy the income that becomes available to you rather than worrying about bills.
Healthy SavingsAre You Financially Ready for Retirement?
When it comes to retirement planning, you have to consider your lifespan and make sure you have enough funds to cover all those years. If you plan to retire early, you should have enough money to cover those additional years, too. The Rule of 25, preparing to have at least 25 times more money in savings as your yearly expenses, is generally a good strategy for prospective retirees to use.
Healthcare, especially an unexpected health crisis, can be very costly. Since Medicare isn’t available until age 65, having the funds or a plan to cover healthcare until you can receive coverage is essential.
Take a look at how much you spend per month on healthcare related items, such as prescriptions, blood tests, or doctor visits, as well as how much emergency services cost in your area. The cost adds up quickly. If you have enough saved up to be able to afford an unexpected emergency or two, you’re probably ready for retirement.
The monthly fixed income for a retiree will be less than what they were used to when working. Developing and implementing a budget that resembles what expenses and income would look like once retired can help you determine whether retiring right now is a good idea. If you can live within your means and stick to your budget, it’s a good indication of your ability to retire.
Retirement can be complicated. If you want to retire early, the process becomes even more confusing. If you’re confused about whether or not you’re financially ready to retire, scheduling a meeting with a financial planner can be a great investment. With their help, they can help you evaluate the variables discussed above, as well as ways to continue building wealth, and therefore, a more comfortable retirement.
Chris Jacob is a Registered Representative with Saxony Securities, Inc.. Securities offered through Saxony Securities Inc. (SSI). Member FINRA, SIPC. Non-security products and services or tax services are not offered through SSI. Cadeau is not affiliated with SSI.