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How do you know you’re ready for retirement?

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Retirement is one of life’s biggest transitions. It is part of growing up and getting older just like graduating from college, getting a first full time job, or getting married. A working career can span 30 to 40 years so it’s understandable why so many people have difficulties with retirement. Hopefully you have been preparing for retirement, but how do you know if you are ready? Here are a few things to consider before pulling the plug on the full time job.

Financial review

The biggest question is – can you afford retirement? Once your full time paycheck stops coming, can you pay the bills? That’s why a financial analysis is important before you kick off the retirement party. To start, keep track of your monthly expense for at least a year. If your financial situation is not ideal, then you will need to cut expenses as much as you can before retirement. Next, calculate your income after retirement. Early retirees will have more difficulties here because they won’t be eligible for social security benefits until 62 at the earliest. There are also penalties for withdrawing from tax advantaged retirement funds if you are not 59 and a half yet. It is essential to have enough income to pay all your expenses after retirement and it’s not easy.

Are you ready mentally?

Most of us like routine and a full time job is a major daily routine. Retirement on the other hand means you will be in charge of your own schedule. Some people have a hard time finding useful things to do in their retirement and spend a lot of time watching TV and being sedentary. Before your last workday, prepare for retirement by thinking about what you would like to do when you no longer have a 9 to 5 work schedule. Some of us put off traveling, home projects, and spending time with family so we can work hard for those promotions. Make a big list of things you would like to do and you’ll be able to keep busy in retirement.

Many people like to work and feel like they are contributing to society. When they retire, they can feel useless and depressed. There are many charities and local organizations that need help. If you want to feel active and useful, then perhaps volunteering at these organizations can help the communities and keep you happy.


Sometime retirement is not a choice, but a necessity. Professional athletes have very short shelf life due to the physical demands of their jobs. Some of us regular folks have jobs that are mentally stressful or physically demanding. If you are unable to perform at an acceptable level, then it’s probably time to retire. Retirement in this case can mean a transition into a new career that is a better fit.

Retirement is a big step and you have to prepare for the transition. It might be worth your while to keep working a few more years if you are not mentally or financially ready. Health can also affect your retirement decision. It’s not worth staying in a job if your health is deteriorating. In this case, a new career or semi-retirement could be the answer.

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