Millennium Magazine_4th Ed

ARE YOU READY TO RETIRE? Some workers start dreaming of retirement their first day on the job. For others, thoughts of a happy retirement take longer to arrive. But no matter what your situation, your retirement years will arrive sooner rather than later. That is why it is so important to assess your retirement readiness. You only get one chance to have a successful retirement, and the right planning and preparation could make all the difference. Here are nine signs that you are ready to retire, and one sign you might want to keep working. 1. You have analyzed Social Security options for yourself and your spouse. Even if you plan to retire prior to age 62, you need to know what your Social Security options are. The size of your Social Security benefit, and when you will start receiving it, will make all facets of retirement planning easier. 2. There are no problems paying the monthly bills. If you are struggling to pay your monthly living expenses, you are obviously not ready to retire. If your bills are under control and you have money left over, retirement looks much more realistic. 3. You have paid off your debt. Entering retirement with debt is a risky proposition, one that could have dire consequences down the road. But if you have paid off your debt, including the mortgage, retirement could be a real possibility. 4. You have developed a post-retirement budget. Expenses change in retirement, and your existing monthly budget may no longer be accurate. If you want to retire comfortably, you need an accurate picture of your post-retirement expenses. 5. Your asset allocation is appropriate for your age and circumstances. As you get closer to retirement, it makes sense to move some money from stocks and into safer investments. A thorough understanding of asset allocation and its implications is an essential underpinning of a successful retirement. 6. You have plans for your time. Once you retire, you will have 8-12 hours to fill every day, and that is a lot of golf. Successful retirement means making plans for your time as well as your money. 7. Your children are financially self-sufficient. Your kids may be grown up and out of the house, but are they really self-sufficient? Are you still paying for things like health insurance and cell phone bills? If the answer is yes, you may want to rethink your retirement. 8. You understand the impact of inflation. Even a low level of inflation could have a profound impact on your future spending power, and it is important to understand this erosive effect. Until you have factored in inflation, you are not ready to retire. 9. You have given your retirement strategy a test drive. The best way to make sure you are ready for retirement is to do a test drive. That means diverting your actual paycheck to a savings or investment account while you try to live on your accumulated savings. If the results of this test drive are positive, you will have extra confidence in your retirement plans. Before you say goodbye to your career and pick up your gold watch, ask yourself what you are trying to achieve. Are you prepared to depart from your professional life, or would you rather stay right where you are? The answer to that question could make all the difference and it is well worth your time and consideration.