We spend the majority of our careers focused on retirement planning — saving, investing, and making decisions with the ultimate goal of achieving retirement readiness and enjoying a financially secure future.

However, as retirement approaches, how do you know that you’re truly ready? What are the key indicators that you are financially prepared? How about whether you are emotionally ready to leave your career? How do you figure out what the best date to retire is?

These are important questions to consider as you decide whether or not you are ready to retire. This blog post will provide helpful and practical information so you can make the best decisions for you and your family.

How Do I Know When I’m Financially Ready to Retire?

These retirement withdrawal strategies can help guide your retirement budgeting and ensure your savings last throughout your retirement years.

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  • The 70-80% Rule: This common rule of thumb says that you’ll need 70 to 80% of your pre-retirement income. For example, if you currently earn $100,000 annually, you will need $70,000 – $80,000 after you retire to maintain a similar lifestyle.
  • The 25x Rule: According to this rule, to live comfortably in retirement for 30 years, you will need savings of at least 25 times the annual amount you plan to spend. For example, if you plan to spend $80,000 annually, you will need $80,000 x 25 = $2 million in savings.
  • The 4% Rule: This rule provides guidelines for withdrawing retirement savings. With this rule, if you withdraw 4% of your retirement savings each year, adjusting for inflation year-to-year, your savings will provide you with enough income for about 30 years.

Am I Emotionally Ready to Retire?

Planning for retirement means more than just financial preparation. It also involves deciding if you are emotionally ready to leave your full-time job.

To help you assess your psychological preparation for retirement, consider these questions from the National Active and Retired Federal Employees Association:

  • Now that I am preparing for my life after retirement, how do I prepare for the non-financial aspect of retirement?
  • How do I define my purpose in retirement?
  • What are my core values that have guided me throughout life?
  • How do I discover what I do best in planning my life after retirement?
  • What is required to create a vision for my next chapter?
  • How do I research resources that I need to prepare for this vision?
  • How do I rehearse my next chapter while I am still working?

Your answers to these questions can hopefully give you a sense of if you are emotionally ready to transition out of the workforce, or if you still need a few more years.

Wherever you are in your retirement planning, it’s important to consider both the financial and emotional aspects of retirement. Doing so can help you ensure that your next phase of life will be both financially stable and emotionally fulfilling.

For a deeper dive, explore WAEPA’s full library of retirement resources planning, which has (almost) everything you need to prepare for Federal retirement.

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Founded in 1943, WAEPA provides current and former Civilian Federal Employees with exclusive Group Term Life Insurance and Short-Term Disability Insurance. WAEPA members have access to resources, tailored specifically to the needs of Feds and their families. Today, more than 50,000 Feds and their families choose WAEPA to be there for life’s biggest moments.