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Finding the right time to retire can be difficult to pin down. Sometimes emotional needs do not exactly match financial needs; other times, factors such as an employer moving to another state or even certain body, health and mental factors may tell us when it is time to start a new chapter. No matter how the decision is made, it’s important for seniors to understand when they will be ready for retirement.

Examine Your Heath

The first thing to asses when contemplating retirement is what you would like that retirement to look like. Of course, most of us imagine ourselves on some private island sipping piña coladas at our leisure, but it is important to be realistic. While some may have the means to purchase a private island, for many, planning for the next chapter starts with assessing ourselves — and our health.

Good health is something many take for granted — often until it is too late. A retirement plan should start with a conversation with your doctor during your regular physical assessment. Your health and wellbeing will likely be the highest expense during your retirement. You may need to have surgery at some point, begin taking expensive medication or using costly medical equipment. Speak with your family and loved ones about your potential care. Will they be your caretakers if your health fails? If not, you may need to allocate or explore options for in-home care or the comforts of an assisted living community. 

Although around 70% of the American population will need long-term care, it is still something for which people rarely set aside enough savings. Some of it is due to simple unfamiliarity with their healthcare; for example, Medicare does not cover the costs of long-term care, but some may be under the mistaken belief that it does. It may be a good idea to look into long-term care insurance possibilities, even if you are currently healthy and can handle your day-to-day activities.

In addition, many believe that Medicare will cover all your health expenses past the age of 65. While the program does cover a number of expenses, medical equipment such as wheelchairs, hearing aids, or even dental and vision are not covered.

Before hopping on that jet and leaving your cares behind with you, think about the support system you may need around you as you age. It is obviously understandable that not everyone can relocate with you, so it is important to realize that you may not have the support system around you if you do decide to set sail. While many seniors relocate as a way to improve their quality of life, it is often a result of finances.

Look at Your Finances

Whether you want to relocate to another part of the country or your own private island — or you have simply dreamed of traveling in your golden years — your financial planning will be one of the most important factors in deciding if you are ready for the next step. Asses your net worth and your savings: is your mortgage paid off? If not, do you have the potential to pay it off? Your home may be your greatest asset if you do have the means to pay off the mortgage.

Take a good look at your savings, including your investments and 401K, as well as any debts or other financial responsibilities, such as children or family members you are currently supporting. A financial advisor can help you get a clearer picture of your finances, and help you find out whether you are able to live off your savings going forward and just how much you can afford to spend.

Unfortunately, for many Americans, savings alone may not cut it — according to the 2017 Retirement Confidence Survey, 24% of Americans reported that they have less than $1,000 in savings. For those that have little in savings, it may be worthwhile to find alternatives to finance your retirement, such as a reverse mortgage.

Other factors to consider are inflation (a dollar saved today will be worth less tomorrow!) and taxes — just because you are no longer working does not mean you will not need to pay them. Whatever income you receive from your retirement funds will be taxed, and property taxes must always be paid. Social security is a major consideration and can help, but sometimes it may be best to wait to start collecting in order to get a larger paycheck.

Make Sure Your Emotional Needs Are Met

Never discount your emotions when contemplating retirement; in other words, do not retire just because someone says it’s “time.” Maybe your private island is actually a business venture you have always wanted to launch but never had a chance, or perhaps your childhood dreams are actually attainable.

A new passion does not have to be a second job — perhaps it is a volunteer project or a nonprofit organization. What is most important is to have a vision and a plan for the future — one question that many forget to ask themselves is “what will I do with my time?”

Try to remember the other factors that define you aside from your career. It is not so easy to just turn off your routine after doing it for so many years. Try to find a new, healthy routine. You could use your free time to exercise, catch up with loved ones or write.

Continue to be social in retirement is also very important, and you may miss the social aspects of your job, especially in the beginning. A support system of friends and family can help with this sudden lack of camaraderie. If not, join a social club or group and take the time to make new friends.

There are many factors that go into deciding when the right time to retire is for you, including your health, finances and emotional needs. When the time to retire comes, being prepared will make entering the next chapter of your life much easier.