Watch CBS News

9 signs you're not ready to retire

William Burlingham/iStockphoto

By Michelle Smith/GOBankingRates

For a long time, you might have been asking yourself, "When can I retire?" But now, retirement is almost here, and you find yourself wondering, "Am I really ready to retire?"

A lot of people underestimate what they need to do financially, mentally and emotionally to prepare for retirement. But that doesn't have to be your story. Make sure you're prepared so you can enjoy your retirement.

Click ahead for a look at nine signs that perhaps you're not ready to retire and need to re-think your retirement strategy plan.


This article, 9 signs you're not ready to retire, was originally published on GOBankingRates.com.

​1. You haven’t outlined a financial plan

iStockphoto

A successful retirement requires a well thought-out plan, but thorough retirement planning is something many people haven't done. Financial professionals, including Michael Foguth of Foguth Financial Group, see it all the time. "I have people who will come in, and when I ask them how much income they need every month to live on, they just look at me with a blank stare," he said.

You can't expect to retire comfortably until you've determined your costs. You should start with your needs, like food, electricity and mortgage, then factor in the costs for your wants. Once you've done that, you need to determine your retirement income. A lot of people plan to retire without estimating their Social Security payments, pension or other sources of income.

2. You still have a lot of debt

iStockphoto

Many people don't even know how much they owe. All they know is their bills are at a comfortable level, and they assume they can continue to pay them even once they stop working. But, you need to take some time to thoroughly look at and understand how much money you owe overall so you can become debt-free in retirement.

If you have a lot of debts, you should keep working until you whittle it down. Credit card balances, auto loans and hefty mortgages and other monthly obligations aren't headaches you want to drag into retirement with you. Those expenses are definitely going to put a strain on your funds, said Katie Ross, manager of education and development for American Consumer Credit Counseling. That's especially true if you're living on a fixed income. And, debt reduces your ability to handle financial shocks and deal with inflation.

​3. You need to work but haven’t found a part-time job

iStockphoto

According to a report from the Federal Reserve, 12.5 percent of people plan to retire and then find a different part-time job while 2.6 percent plan to find a full-time job after retiring. But if you haven't lined up another job, you might want to stick with your current employer a little longer.

Don't assume that because of your years of experience and stellar references that companies would jump at the opportunity to bring you on board. In fact, data show that's often not the case. After the recession, the unemployment rate for people over age 55 rose to near-record levels. And in 2014, of the people who suffered long-term unemployment -- having to look for a job 27 weeks or more -- about 45 percent of them were over 55, according to the Bureau of Labor Statistics.

4. You haven’t reassessed your portfolio

iStockphoto

Your portfolio will become a crucial part of your financial well-being when you're retired, and reassessing it is an important part of retirement planning. "It's not uncommon for me to sit down with clients, in their early-to-mid-60s, who have never adjusted their portfolio to reduce risk as they approach retirement, and this can be extremely risky," said Kevin Schwarz, a financial adviser at Concord Wealth Management.

Say a client wanted to retire in 2008, during the height of the recession. His portfolio could have been worth nearly 30 percent less than the year before, Schwarz explained. "If you haven't planned accordingly, you either keep working until the market is favorable or spend less in retirement," he said.

A lot of people have portfolios that have taken a major hit along the way. But since they've taken a passive approach to investing, they don't know until they're ready to retire -- or worse, after they've retired. Then, they want to liquidate some assets.

Before you retire, you need to know how much you have and your options for accessing it. And the closer you get to retirement, the more you need to shift your investing strategy toward income-producing assets and wealth protection.

5. You haven’t decided what you’ll do with your time

Graham Rebbeck/iStockphoto

If your only friends are people you work with or all your friends are still working elsewhere, you need to decide what you're going to do with your time. Lonely retirees are common, and that sometimes leads to depression. "It's important to develop social networks before taking the plunge," said Julia Chung, the certified financial planner (CFP) behind JYC Financial.

People think they have a lot of interests and hobbies until they're confronted with a future full of free time. When you're retired, every day is like a Saturday. And if you get bored and don't have enough hobbies, you're at risk of overspending, said Schwarz.

​6. Work is still important to you

iStockphoto

If work is still important to you and you're aiming for promotions and raises, you shouldn't rush into retirement. Stay in your field as long as you feel motivated and driven to achieve. Retiring before you reach your professional goals can result in regret. Besides, "the resulting pay hikes and other earnings can also be a good way to build up some extra savings," said Katie Ross.

​7. You haven’t thought about your retirement identity

Lisa F. Young/iStockphoto

Right now, you might be a business owner or you might have a lot of authority at your current job. But who will you be when you retire? People might need you and value your contributions now, but where will you get your sense of purpose and fulfillment when you stop working? The fact is, a person's position in the world generally changes once they stop working.

"Emotional preparedness is key," said Chung. "If the 'Who am I?' question is readily answered by a description of the work you do, you may not be ready to retire. Identity is a huge part of retirement readiness, and many people suffer depression after retirement because they haven't adjusted their sense of self to fit a retired version."

8. You’re caring for children or elderly parents

iStockphoto

A lot of people who want to retire are either responsible for their elderly parents or they're still caring for a child. And according to the Pew Research Center, 15 percent of people age 40 to 59 are "sandwiched" and providing care to both children and parents. You cannot realistically ignore those demands when you plan for retirement. And in many cases, it's best to continue working longer than planned until you have fewer obligations.

Caring for aging parents and children can deplete your nest egg faster than you think, said Schwarz. "These costs are variable as well," he added. "On average, education costs are increasing at about 3 percent per year, and nursing home care is increasing around 4.3 percent. If you haven't set aside the appropriate assets to cover these expenses, you may come up short in retirement."

9. You’re not on the same page with your spouse

iStockphoto

Retirement is a major life change, and it's a household decision. Too many people think solely about themselves and their retirement plans. But when you plan to retire, you need to be on the same page with your spouse. Your spouse might not plan to retire for many years, and being retired alone might not be as fulfilling as you expect.

Also, the reduction in income could also cause financial problems and place more strain on your partner than you realize. "Your spouse might not be ready to retire with you or might still need your income to pay for current expenses," said Kevin Schwarz. Without it, your household debt might rise, or your spouse might have to work longer than intended.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.