Ready for Retirement or Not? 6 Signs That Show Your Retirement Readiness

You might be a diligent saver who is doing everything they can for a secure and happy retirement. But how do you know if you’re doing things the right way? It’s tough to guess how much money you’ll need to retire securely. This is why many people struggle with retirement planning. They are never sure if they have enough saved to retirement while still maintaining their standard of living. 

Fortunately, there are some easy ways to tell if your retirement planning is sound. There are a few key signs that you should look out for before considering retirement. By checking off these signs and keeping track of your savings, you’ll be able to retire in any way you see fit. 

Have You Started Saving/Retirement Planning? 

Before thinking about retirement, you need to think about your retirement plan. It is unwise to retire from the workforce without having sufficient savings to fund your living expenses. Plan for your retirement at least a few years before your last working day! If your savings fall short of your expenses, then you will end up facing financial hardship during your retirement years. Moreover, you should also consider additional luxury expenses if any, such as money for vacations, parties, family gatherings etc.  

You can consider getting an annuity plan if you want to continue getting regular income during your retirement years. Check out Edelweiss Life- Active Pension Plus if you want to learn more about annuity plans and how they can benefit you.  

Do You Have Any Debts? 

Even if you have a good retirement plan, you shouldn’t consider retiring if you have any outstanding debts or loans. Retiring with pending loans can greatly strain your savings. The toll of having to repay a loan can upset your financial stability and create unnecessary stress during your retirement. So, the best course of action is to pay off all your outstanding debt before leaving the workforce for good.  

Current Expenses VS Future Expenses 

Retirement should not compromise your standard of living in any way, shape or form! Consider the expenses you currently spend to maintain your standard of living, then calculate the savings you will need to maintain the same living standard in the future. Your future expenses should also factor in inflation and other miscellaneous costs like healthcare. If you are financially struggling to make ends meet right now, then you definitely need to wait for a while before finalizing your retirement plan.  

Do You Have an Emergency Fund? 

Even if your retirement plan is on track, you still need to be wary of unexpected emergencies. Life is often unpredictable and can throw curveball at you that disrupt even the best-laid plans. For example, job loss, critical illness, or an accident can completely eradicate your retirement corpus. This is why you should have an emergency fund to supplement your regular savings. This fund should only be used in case of severe emergencies that could potentially threaten your retirement plan. Your emergency fund should at least be equal to three to six months’ worth of living expenses. With this fund, you will be able to deal with emergencies dipping into your retirement corpus. 

Health Insurance is a Must 

Health insurance is not only a sign of retirement readiness but is also a general requirement for financial security! Health problems are completely unpredictable and can strike when you least expect it. A good health insurance plan keeps you financially secure in case of any medical emergencies. Health insurance is even more important for those who are past their mid-40s. As you grow older, the risk and frequency of health conditions increases. Without a health insurance plan, an unexpected medical emergency might devastate your retirement savings.  

Do You Have Any Dependents? 

Finally, you need to consider your dependents before you retire. If you don’t have any dependents, then great! You have no responsibilities that can hinder your peaceful retirement. However, if you have children or other dependents who need your income to live comfortably, then now might not be the right time to retire. Without a steady income source, your financial responsibilities to your dependents will start to chip into your savings.  

The best course of action is to help your children/dependents stand on their own two feet before you consider quitting the workforce. Plus, once your children are financially independent, they will be able to assist you during your retirement years.  

Conclusion 

So, to sum it up- The six signs that you are ready for retirement include: 

• Having a retirement plan 

• Not having any debts 

• Savings enough to meet current expenses 

• Having an emergency fund 

• Health insurance cover 

• And not having any obligations to your dependents 

If you satisfy all these six factors, then you are ready to enjoy your retirement years free of financial stress!  

If you are still in the process of forming your retirement plan, consider getting an annuity plan to supplement your savings. An annuity plan provides regular income during your retirement years, helping your meet your day-to-day expenses without worry! Edelweiss Life- Active Pension Plus is an annuity plan that is highly customizable and provides regular income for the rest of your post-retirement life.