Can I retire? The Importance of Retirement Readiness

Can I retire? The Importance of Retirement Readiness

By Olivia Casale, CRPC™, APMA™

Associate Financial Advisor

We get this question all the time. How much longer should I work? Will I run out of money? How will retiring affect my lifestyle and tax? What will my purpose be when I retire?

Retirement is a major life milestone and determining whether you’re financially ready requires careful evaluation. At Inspire Confidence Group we assess your income, savings, expenses, and long-term goals to ensure you can retire comfortably without running out of money. Here are the key factors we consider when answering, “Can I retire?”

1. Do You Have Enough Savings?

First, let’s evaluate your total retirement savings, including 401(k)s, IRAs, pensions, and other investments. A common rule of thumb is the 4% rule, which suggests withdrawing 4% of your savings annually to make your funds last 30 years. However, personal factors like inflation, healthcare costs, and market conditions may require adjustments.

2. What Are Your Income Sources?

Beyond savings, we look at steady income sources such as Social Security, pensions, rental income, or part-time work. We can help you determine when to start claiming Social Security—waiting until age 70 increases monthly benefits. Ensuring a reliable income stream can reduce the need to withdraw large amounts from savings.

3. What Are Your Expenses?

Understanding your expected retirement expenses is critical. Let’s calculate housing, healthcare, travel, and lifestyle costs. Many retirees spend 70-80% of their pre-retirement income, but this varies depending on location and health. Cutting unnecessary expenses can improve financial security.

4. Have You Factored in Healthcare and Inflation?

Healthcare costs rise with age, and Medicare doesn’t cover everything. We can review Medicare supplements, long-term care insurance, or Health Savings Accounts (HSAs) to manage future costs. Inflation also impacts purchasing power, so investments should be structured to outpace rising costs.

5. What Is Your Investment Strategy?

At Inspire Confidence Group, together, we assess whether your portfolio is properly allocated for retirement. As you approach retirement, we may recommend reducing risk by shifting to bonds, dividend stocks, and income-generating assets while keeping some growth investments to combat inflation. We utilize the three-bucket approach to cover immediate need while ensuring steady income for the mid-term and long-term growth to sustain your retirement.

Final Thoughts

The answer to “Can I retire?” depends on savings, expenses, and risk tolerance. We are here to help ensure you retire with confidence by aligning your finances with your values and lifestyle goals. If you’d like a personalized retirement analysis, let’s run the numbers!