Am I Ready to Retire?

The money question: about 70 to 80%

A common rule of thumb is that you’re ready to retire, financially, when your income from every source covers about 70% of what you earned while you were working. Those sources are Social Security, any pension, and what your savings can reasonably pay you each year.

Why not 100%? Because some costs stop or shrink when the paycheck does. You’re no longer saving for retirement, no longer paying payroll taxes on wages, and often no longer commuting or buying work clothes. You need to replace your lifestyle, not your salary.

Adjust it for the way you’ll actually live:

• About 70% if you expect a quieter retirement close to home.
• 80% or more if you plan to travel, eat out several times a week, help family, or keep expensive hobbies.
• More in the early years for most people. The first decade of retirement is often the most active, and the most expensive.

It’s a starting point, not a plan. Healthcare before Medicare, taxes on withdrawals and the timing of Social Security can all move the number. How Much Do I Need to Retire? walks through the math, and Am I On Track for Retirement? shows where you stand today.

Seven psychological factors to consider

Retirement planning is about more than numbers. How you think and feel about this change can shape how well you enjoy it. Use these seven factors to reflect, on your own and with the people closest to you.

1. Identity and sense of purpose

For decades, work answered “what do you do?” for you. Before retiring, it helps to ask what will give your life meaning and structure once it doesn’t.

Examples are mentoring, volunteering, a business, a craft, or caregiving. Name what you’re retiring to, not just what you’re retiring from.

2. Loss of daily structure and routine

A work week comes with a schedule you didn’t have to build. Retirement doesn’t, and without one, days can blur.

Find a weekly rhythm for exercise, social time and projects. A few fixed points in the week can ease the transition.

3. Social connection and loneliness

Colleagues are often a main source of daily social contact. When work ends, many people find their social world shrinks faster than they expected.

Building friendships, community groups and hobbies outside work before you leave is a protective step.

4. Relationship dynamics with a spouse or partner

You may not have spent this much time together since before work and kids took over.

Couples benefit from discussing how they’ll divide household roles, and how much time to spend together versus apart. And check that your retirement visions match: travel, where you’ll live, and how active you want to be.

5. Attitudes toward money, spending and security

Moving from accumulating to spending is an emotional shift, not just a math one. After decades of saving, drawing your savings down can feel wrong, even when the plan says it’s fine.

Recognizing “spending guilt” or a fear of market swings early allows for a plan you can stay comfortable with. A written income plan, showing what you can spend each year and where it comes from, often makes spending feel like the point of all that saving rather than a threat to it.

6. Expectations versus reality

Idealized expectations of retirement as one long vacation can distort decisions. So can the opposite, dread.

Talking to recent retirees, and testing a trial run such as a long sabbatical or a phased schedule, can ground your expectations. Easing in has a money benefit too: it tests the budget while the paycheck is still there, and gives savings and Social Security more time to grow.

7. Health, aging and sense of control

Retirement brings the future into focus: changing health, mortality, and the possibility of depending on others. Some people respond with anxiety, others with denial.

Thinking through your health, cognitive vitality, care preferences and legacy wishes, and discussing them with your family, can make this feel more manageable. What Will Healthcare Cost Me in Retirement? covers the cost side, and What Would My Family Need to Know If Something Happened to Me? is a one-page way to start the family conversation.

A short checklist before you set the date

• Your income from all sources covers about 70 to 80% of what you earn now, and you know where each part comes from.
• You have a plan for health insurance until Medicare starts at 65.
• You’ve decided when to claim Social Security. When Should I Take Social Security? helps you choose.
• You can name what you’re retiring to, and a few fixed points in your week.
• You’ve started building friendships and activities outside work.
• You and your partner have talked through roles, time together, and what you each picture.
• You’ve talked to someone who retired recently, or tried a trial run.
• Your family knows your care preferences and wishes, where things are, and who to call.

Where to start

Take the two-minute Retirement Blind Spot Check. It covers income, taxes, family readiness and healthcare, and shows where your plan might have a gap.

If you’d like to talk through either side of it, the money or the rest, the first conversation is free, by virtual appointment, with nothing to buy and no obligation.