money
Finance

5 Signs You Are Not Financially OK to Retire

Retirement can often seem like a distant dream, even when you’re getting close to the government set retirement age. That’s because there are so many different stories regarding how much funds you’ll need to retire comfortably.

The simple fact is that everyone is different. What you’ll need to retire will depend on your intentions, your spending habits, and, in part, whether you own your own property or not. After all, if you intend to travel the world you may find it costs you a little more than staying at home playing bingo!

Of course, you also need to consider whether you gain early access super funds or not, this may affect your intended retirement age.

However, no matter how you look at it, there are 5 signs that you clearly aren’t ready for retirement.

  • Debt

If you have any type of debt, including your mortgage, then you’re not ready to retire. Debt means a regular monthly payment. If you don’t have a job then these payments will need to come from your pension funds, which could seriously affect the amount of funds you have available to survive on each week.

  • Savings

As well as clearing your debt off before retiring you need to have some funds in savings. This will allow you to cover unexpected costs. The longer your retirement the more likely it will be that there are unexpected costs.

Having no savings means you’ll need to dig into your retirement pot, reducing your future weekly amount and potentially your quality of life.

  • Supporting Children

It shouldn’t be surprising that if you’re currently supporting children you’re not ready to retire. This isn’t an age thing but a financial issue. If you are paying funds out to look after your children it will be very difficult to set or stick to any sort of budget.

You may also be hit with a variety of unexpected expenses.

  • Lack of Investment Funds

Retiring means more than having money in the bank. It means you have a pot that can be invested to create an income that will last you for life. If you don’t have a pot then you’re not going to receive an income and may find retiring impossible.

The sooner you start building an investment pot the better.

  • Banking on The State

Finally, if you intending to rely on the state pension then you’re probably not ready to retire. This is enough to give you a basic level of living and nothing else. If you want to enjoy your retirement then you need a little more.

That means saving for a pension pot and creating a plan for the future.

The good news is that it’s never too late to do something about it, even if you’re at retirement age. You simply need to look at the assets you’ve got and how they can work for you. It’s also worth considering if you can survive working part-time, partial retirement can be a good option for many people.