Choosing to retire can be exciting and intimidating at the same time. Deciding when it is time to officially stop working at a career that you have dedicated 30 years of your life to isn’t something to do lightly. Before you consider whether or not to keep working, you should consider the advice from MyWealthandInvestment to decide if you financial situation is viable for the long term.
Once you officially retire, you cannot go back. So, how do you decide when the time is right to retire?
- You are old enough
While age alone is not a reason to retire, there are benefits to waiting until you’ve hit the magic number of 66. If you are basing your choice on whether or not you can receive your full Social Security benefits, you have a few choices. You can get partial benefits at age 62, full benefits at 66, and even more benefits at 70.
Some people choose to retire much earlier than their 60s, because they have enough money saved. But, that government check can be a strong incentive to until becoming a sexagenarian.
- You’ve paid off your debts
If you are still paying for your home, your car, and a bunch of credit cards, you should wait to retire. Those expenses can drain a retirement account, and they can quickly eat up your Social Security benefits. Retirees are considered to be on a fixed income, and debts are not good items to place in a fixed budget. You should be able to get through retirement without having to take any new loans, too.
- You can set a viable retirement budget
Prior to ending your reliable income, you should be completely sure that your retirement benefits and savings will suffice. You will continue to have big expenses, like insurance, taxes, and health care. You will also need to have money for food, utilities, and entertainment. And, you should have some money left over each month. If your budget cannot be stretched far enough, then you should wait until you set the alarm clock to retirement.
- Your children are self-sufficient
If you are reading this selection, then you know children can be expensive. If you are still taking care of your children, then retirement might have to wait. College expenses aren’t decreasing, and many adult children return home because they cannot find well-paying jobs. If you aren’t paying for your children, you might be paying for your aging parents, which is another real reason not to retire.
- You’ve consulted with professionals
Prior to retiring, you should meet with at least one financial advisor and use a retirement calculator. Financial advisors can thoroughly assess the viability of your portfolio to tell you if it will last for as long as you hope. If you meet with two financial advisors and they tell you different things, meet with someone else. Your tax professional might also be able to help, as they are fully aware of your financial status. Don’t take chances on your own.