If retirement is creeping up on you, you might be asking yourself if you are really retirement ready. But how do you know?

Well, it’s important to look at your retirement as a whole and not just a fixed point for your savings. There are many aspects to consider outside of your finances — though that is obviously an important consideration. However, finances are simply a fraction of what you need to consider when wondering if you’re ready for retirement. Fortunately, we have created this assessment to help you determine how close you really are.

Are You Retirement Ready?

Finances First

Savings:

Your savings are the most important consideration when it comes to your retirement, there’s no way around it. But how do you know for sure if you’ve saved enough? For a complete review of financial preparations, click here.

For your savings, you will likely want to consider a Roth IRA. A Roth IRA is a retirement account that allows your investments to grow tax-free with certain conditions for untaxed withdrawals. Benefits of this type of account include:

• Tax-free investment growth.
• Some distributions are tax-free.
• Able to withdraw $10k as a first-time homebuyer tax-free.
• You can make contributions at any age.
• The balance can be left to heirs.

Income

According to AARP:

“The estimated average Social Security retirement benefit in 2020 is $1,503 a month. The maximum benefit — the most an individual retiree can get — is $3,011 a month for someone who files for Social Security in 2020 at full retirement age, or FRA (the age at which you qualify for 100 percent of the benefit calculated from your earnings history).”

Social security isn’t the easiest thing to calculate, however, with these simple tips, you can be sure to get the most out of your payouts.

• Work for at least 35 years (social security payments are based on your 35 years of earnings).
• Don’t shy away from requesting a raise (making more will give you better social security benefits).
• Make sure you paid your social security taxes every year.
• Work until you are 66 or 67, which is the age you can receive full benefits.
• Keep earnings in retirement low to continue earning full benefits.
• If you can, delay retirement until age 70 so you will get a bigger monthly payout.

Other Assets:

This one goes without consideration more often than most would admit, but accounting for all your assets is the next step in retirement. In this delicate transition, a major challenge is spending down assets to continue paying for your expenses. First, you will want to spend down taxable assets, then tax-deferred, and lastly tax-free. This way you will spend down lower-earning assets first saving the higher-earning assets for later.

Health Considerations

• You will need to get familiar with your Medicare options. It may surprise you to learn that Medicare doesn’t cover everything and you’ll need to understand the coverage long before you need to use it. Don’t let anything catch you off guard. For an overview, read this article.

• Consider long-term care options. The fact is, for individuals over 65, 70% will need some sort of long-term care. Unless you already have a plan in place you’ll need to learn more about it. If you want to learn the three myths about long-term care, we have written about them here.
  • The best thing you can do for your health as you age is to take care of yourself early. This will help keep health costs low later on.

Home Matters

Deciding where you want to remain can be very stressful, but not everyone will be able to stay in their homes unless properly prepared. Where you want to age requires several important considerations; do you want to stay…

• Close to your family?
• Close to friends?
• In your home?

And

• Do you want to reduce your maintenance responsibilities?

If you want to stay in your home, there are some modifications you can make to help you age in place long term. For more on aging in place, visit our on-demand webinar Aging By Design. But first, keep the following in mind:

• Decide early on how many responsibilities you can manage.
• Don’t rely on your children to help out.