Often, people feel that retirement is far away, but it is something that many people come to face unprepared. A survey conducted by the American Society of Pension Professionals & Actuaries (ASPPA) shows that 56% of workers worry about spending their retirement money and 61% have trouble calculating how long their savings should last. This anxiety can come from not knowing whether they have savings or money.
But there are clear signs that you may be more ready for retirement than you think. Knowing these signs will give you some comfort in your financial future. In this article we look at signs you are financially ready for retirement.
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“The income you can generate from your assets is more important than the amount you make,” said Stephen Kates, certified financial planner (CFP) and chief financial analyst at RetireGuide.com. “The most important step before retirement is to understand where your money will come from and where it will go.”
Another sign that you’re financially ready for retirement is having more income. Social Security may not provide you with enough money to cover all your expenses. In fact, the average Social Security benefit in 2024 is just $182,822 per month, according to US News and World Report.
Kates also recommended investing in other sources of guaranteed income, such as annuities. Also, investing in rental properties or high-paying stocks can also help provide you with additional cash flow. If you already have these sources working, it means you are doing well in your future planning.
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How much you have saved for retirement is one of the best indicators of how prepared you are. Most financial experts advise you to save at least 10 to 12 times your annual amount before retirement. This means if you make $50,000 a year, you should save $500,000 to $600,000 for retirement. This type of security can give you a good platform to let go.
But this is good news if you’ve been putting some money into your retirement accounts regularly. One of the best things about 401(k) and IRA plans is that many people use them to save money. If you are adding to these accounts and doing it regularly, then you are not taking your future for granted.