If you are nearing retirement age you may be wondering, how will I know when the time is right to retire? The answer is really not a simple one, and each decision is unique. While many people may think that you will be ready at a certain age or when you have a certain amount of money saved, there are other factors to consider. Here are some items you will need to look at closely to see if you are ready for retirement.
Yes, money will matter and you will need to make sure you have enough of a nest egg set aside to retire comfortably. It is a good idea to look at what you think your retirement budget will be. While you won’t have the cost of work expenses, additional expenses for travel and hobbies may increase your current budget.
Look at all the sources of income you will have once you do retire. Factor in any pension plans, social security, investments, part time income and wherever else you may be drawing funds from. Weigh that against your budget and see where you come out.
Social Security can be collected at age 62, but some find it better to wait. This is something you will want to consider. If you wait to collect, for each year you wait, the larger your monthly check will be. You can delay collecting Security benefits until the age of 70. Many people who are able to wait do in order to collect a higher monthly income once they are older and are more likely to need it.
If you are over the age of 65 you can go on Medicare and you will want to make sure that you sign up as soon as you are eligible in order to avoid additional costs. If you are not 65 however, you will need to get health coverage elsewhere. If you have a spouse that is still working can you get coverage through their employer? Can you receive COBRA benefits or will you have to take out a personal policy? No matter what option works out best, you will need to factor the cost into your retirement budget.
Some people completely overlook how they will meet their social needs once they retire. If you are someone who thrives on the everyday interaction at your place of employment, you will want to weigh that into your decision. It can be a difficult transition for some to leave their place of employment from a social stand point.
Consider Part Time Employment
Many people, even if they have the money may benefit from part time employment. It is a great way to supplement your income, especially in the early years of retirement. For those who need the social connection with others, it allows for that with a lot less working hours.
Finally, keep in mind as you are making the decision to retire or not to retire, that only you alone can decide if the time is right for you.