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How Can I Know if I’m Ready to Retire?

Timothy K. Hamilton

Are you ready to retire?

How would you know?

Retirement is certainly about financial readiness. But it is also about so much more than that. I think it is important that you address some very important issues:

First, Are you emotionally ready to retire? Work is a great source of identity for most of us. Just read the death announcements. “Joe Blow, 66, a plumber, died.” That’s it – how old he was when he died, and what he did for a living while he lived.

Is your identity wrapped up in what you do all day for a living? If so, are you ready to give that up for…well, that’s a darn good question. If you retire, what exactly will you do with your time all day? Some people have a great answer to that question. Others stare back at me blankly, as if I’d asked them to recite the Gettysburg Address backwards in Latin.

I, for one, know I’m definitely not emotionally ready to retire right now. Not certain I ever will be. I’ve told a few select friends that if they ever see me wearing khaki pants and white tennis shoes walking slowly ten paces behind my wife at the grocery store at 10 a.m. on a weekday morning, just put me in a casket, cause I’m dead.

Second, ask yourself, “Am I physically ready to retire?” Before you are ready to make any big decisions about your future, you’d better get a good, solid evaluation of the health of the only vehicle you’re ever going to get to take you through retirement – your body. I’ve known people who actually began diet and exercise programs after they retired. Maybe it was a health scare, or maybe they just finally woke up to the reality that if they lose their health, not much else can compensate.

You may want to see a doctor to find out how your health rates, so you can make the most of what you’ve got and take care of it. It’s never too late to do the best you can.

Third, are you financially ready to retire? Ah, you knew we’d have to get around to the money talk sooner or later. If you are nervous about the prospect of retirement, I suspect you already know you may not be financially prepared. Fine.

Just like you need to see a doctor to get a realistic physical check-up, so you need to see a financial advisor to get an idea of where you are fiscally.

Your advisor can tell you how far off from retirement you are (in term of dollars and time) and what it may take to get you there. Remember, your advisor doesn’t have a crystal ball, so telling you exactly what’s going to happen over the next five to ten years is not a realistic question to ask.

What you can ask is: where am I? What do I have left to do? Do I need to keep working? If so, can I get away with making less money, which is a real possibility for an older worker laid-off or forced into early retirement.

None of us know what the future holds. But now is the time to make a realistic assessment of the present, and let that dictate what your next steps should be.

Byron is a Certified Financial Planner and Managing Director of the Planning Group at Argent Advisors, Inc.
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