If you are ready to retire, you need to make sure you are financially ready to do so. The last thing you want to have happen is to retire and find out you cannot afford it. There are many tips that you can follow to help you know that you are ready, two of which are listed below:
Hire a Professional
The best thing you can do is to hire a professional financial planner to help you. The financial planner will ask you to bring several things with you when you meet. Much of this information will come from your employer. For example, you should bring all information about your current pension plan and whether or not you have any retirement benefits through your employer, such as a 401(k). The financial planner will also want to know how much money you have saved. Along with the documents from your employer, bring with you any information about how your retirement plan works. The professional may also want to see information about your Social Security benefits. If you have made any investments, such as CDs, IRA, or annuities, the financial planner will want to see documentation about this as well.
Once the financial planner has all the information they need they can determine if you should retire. This professional can also tell you how much money you can spend each month.
Use a Retirement Calculator
There are many things you can do on your own to help you determine if you can retire. One of these things is using a retirement calculator. You can find this retirement calculator online through a variety of websites.
With the calculator you input your information into an online form; most retirement calculators require the same information, including your current age, the age at which you want to retire, the age when you started contributing to your retirement, an expected investment rate of return, your minimum contribution, your maximum contribution, and your retirement plan value.
When the retirement calculator finishes calculating you will be shown a number -- this number is the amount of money you need to retire. You should know this calculator is only an approximately amount, and does not take into account the performance of the investments you have, as well as any fees or taxes you pay.
The financial planner may also use their own retirement calculator when determining if you have enough money to retire.