Many people assume that they will need to work until they reach 65, which is the average retirement age, but others think they will need to work even longer. You may focus so much on reaching a specific age you have in mind that you don’t take the time to actually look around and decide if you can retire. There are a few key signs that you can retire and stop working.
No Debt
The best time to retire is when you have no debt or significantly less debt than you had in the past. Some debt such as owing a few more year’s on your home or having a car that you still need to pay off is fine. You should look at and compare the high interest and high risk debt that you have to debt that has fewer risks. Some refuse to retire until they pay off their homes because they don’t want to risk losing their homes to bankruptcy at an advanced age.
Financial Plans
When you have financial plans for the future, it may be a good time to retire. Most employers offer pension plans that allow you to pay a portion of your paycheck into that fund and take money out when you retire. If you worked for more than one employer in the past, you may have several pensions. Many people can also draw Social Security when they retire, which the government bases on how much they worked and earned over the years.
Savings
Another sign that you can retire is when you have enough savings to cover your retirement years. You may have a savings account that you paid into over the last few years or some stocks and bonds that you purchased in the past. Many of the people reaching retirement age also have fixed deferred annuities that they set up in their younger years. As those annuities grow and mature, you can take out cash to cover your expenses. When one or more of these signs apply to you, you can feel safe and confident in retiring.
