10 Signs You Aren’t Ready for Retirement (And How to Get Ready)

Do you have a good idea of what your retirement looks like? Many people do, but they’re often surprised at how inadequately prepared they actually are.

Retirement is something to look forward to, but it’s also something you need to meticulously plan for. You need to know how you’re going to pay for everything, from your housing costs to medical expenses, and all that falls in between. Now is the time to look through your plans and determine whether you’re ready.

Here are some signs you might not be ready and how to get there.

1. You Have Significant Debt

If you have a significant amount of bad debt—credit cards, car loans, and the like—it’s not going to be easy when you retire. This is especially true if you expect your income to decrease during your golden years.

To get rid of bad debt, you need to come up with a plan to pay it off before you officially retire. If that means you work a few more years or take on a side gig you can do from home, it’s important to get this debt off the books, or you’ll find your hard-earned money disappearing quickly.

2. You Spend More Than You Earn

Many people have the problem of spending more than they earn. They struggle and tend to live paycheck-to-paycheck. This may be tied to bad debt, or it may be simply that they’re not making enough to sustain their lifestyle.

If this sounds like you, there are a few solutions. First, look at your spending and pinpoint any expenses you don’t need to carry. If your budget is already tight, it’s not going to get better in retirement. This is the time to really dig deep and decide if you need to downsize or get a part-time job to help.

3. You Don’t Have a Budget for Health Care

As you age, you’re more prone to health issues. This is why it’s important to have a plan in place for health care expenses. You will be eligible for Medicare when you hit 65, but it’s not a be-all, end-all plan.

In other words, you will have out-of-pocket expenses. And, if you have a lot of healthcare needs, those costs are going to add up quickly. Make sure you have a budget for this as part of your retirement planning.

4. Your Emergency Fund Is Low

We would all love to be prepared for all of life’s eventualities, but sadly, that’s just not the way it is. If your emergency fund is low or nonexistent, you might not be in the best financial condition to retire.

Of course, you can solve this by adding to the fund, which should have between 3 and 6 months’ worth of expenses ideally. That could take some time, especially if you need to make room in your existing budget.

5. You Don’t Have Enough Retirement Savings

If this sounds like you, you’re not alone. In fact, about half of working households currently find themselves in the same dilemma. With Social Security solvency concerns, you can’t exactly wing it either. So, what do you do?

Now is the time to get really serious about your retirement fund. If you have at least a decade of working left until retirement age, you can still do yourself a huge favor and start contributing as much as you can. When you’re in your 50s you can contribute even more to the various funds, whether it’s a Roth or 401(k).

6. You Still Enjoy Working

Just because you reach retirement age doesn’t mean you have to stop working. In fact, you could work the rest of your life if you wanted to and were physically able to.

But, here’s another option. If you’re not exactly ready to stop working, why not consider a freelance job you can do from home with more flexibility? Or perhaps you could start your own business in the years leading up to your retirement. That will certainly keep you busy.

7. You Don’t Know How Much You’ll Need in Retirement

While nobody can predict the future, you can certainly estimate how much you’ll need to make it through retirement. This figure will vary depending on the lifestyle you choose to live and your financial standing at the time of retirement.

The best thing to do right now is speak with a financial planner who can paint a picture of what you’ll need based on your personal goals. It’s different for everyone. They can then look at what you have saved up now and what you’ll need to put away to be able to retire on your terms.

8. You Lack a Financial Plan

A financial plan is a great tool to have throughout your life, as it helps you zero in on your goals and overall financial picture. However, it’s imperative to have one in retirement—even more so if you’re retiring on a limited income.

A financial plan lays out your finances in a nutshell. It will show you if you have enough in savings to get through your golden years. It will also show shortfalls. If you haven’t done a financial plan, all is not lost. Speaking with a financial planner will yield you the information you need to make an informed decision.

9. Your Viewpoints Differ From Your Partner’s

Everyone has their own viewpoint on what retirement looks like, and sometimes, despite having a solid relationship, you and your partner just can’t agree on what that is.

This isn’t necessarily a reason to delay retirement, but rather, a reason to be a bit more introspective about what you want and how you can compromise with your partner so you both get the best of your golden years.

10. You’re Not Sure What to Do with Your Free Time

This is a big one. Some of us have a clear picture of what we want to do the day we retire. However, some of us just … don’t.

If you are content working and aren’t yet sure what you would do in your free time, then keep working, if you choose. Otherwise, you will find you’re bored and looking for something to do. In the years leading up to your retirement, start crafting a plan. Think about hobbies you want to take on or activities you want to do but have no time for now.

Is It Too Late to Save Up?

In theory, no. However, depending on how late you start, you might find you have to contribute more just to have the bare minimum to survive. Ideally, you’ll start saving when you start working full-time. In real life, though, it doesn’t always play out that way.

Even if you start in your 30s or 40s, you can start saving up, you’ll just have to up your contributions. Make sure you max them out. Then, when you reach 50, you can add even more to your fund in what’s called make-up contributions.

Why You Shouldn’t Rush into Retirement

We get it. You’ve worked hard your entire life and you want to take off and just do your own thing. If you have concrete plans as to why you need to retire at a certain age, by all means. But, if you’re not ready, it’s definitely not worth rushing in.

If you work just a few more years, you’ll benefit much more, especially in terms of Social Security. Plus, your retirement funds (hopefully you have them) will have more time to grow. That will put you in a much better spot to retire and truly enjoy the rest of your life.