In 2016, the average retirement age in the United States was 65 for men and 63 for women, according to Annuity.org, despite the designation of 67 as the “official retirement age” (for those born after 1959).
But what if you’re becoming more resentful of the presence of your job in your life? What if you’re daydreaming about retirement during work hours? Whether you’re 30, 40 or 60, you may be in a position where you’re ready to retire, particularly if you’ve been a close follower of the Financial Independence, Retire Early (FIRE) movement.
But beyond feeling like you’re ready to retire, what financial signs might indicate that you’re ready to attend your last meeting — forever?
Let’s walk through some financial signs that indicate your retirement readiness.
Financial Signs that Point to “Retirement Ready”
The best combination that points to “retirement ready” involves a combination of feeling as if you’re emotionally ready as well as making sure you have your financial ducks in a row. Here are the indicators that can help you make that all-important decision.
Sign 1: You’ve taken care of debt.
How much debt should you get rid of before you retire? Ideally, all of it. However, if you still have some hanging debt, here are a few items you can tackle:
- Get rid of credit card debt. High-interest credit card debt can impede the money available to you in retirement, particularly because you’re living on a fixed income. The best way to do it? Stop using credit cards and figure out which of your credit cards has the highest interest rate. Make the minimum payments on your cards and pay more toward the credit card with the highest interest rate. Once you eliminate your highest interest rate credit card, tackle the card with the next highest interest rate. View eliminating your credit card debt as your most important job. You may not be ready to retire if you have ample credit card debt.
- Pay off student loans. Do you still have student loans hanging around from undergrad or the MBA you got later in life? If you’re a FIRE Movement participant, you probably already realize that you should eradicate student loan debt before you retire. However, Americans over the age of 50 owed more than $260 billion in student debt in 2018, according to the Federal Reserve. You may have also co-signed loans for children or grandchildren, so remember that as well — that debt still counts, because you’re liable if your child doesn’t pay off the loan.
- Eliminate your car payment. Ask yourself whether you need more than one vehicle after you retire. If you have two vehicles and decide you want to eliminate one from your fleet, you can sell one car and pay off the other with the proceeds. You’ll likely feel relieved …….