How to know when to retire: 6 signs you’re ready

Knowing when to retire comes down to two things: your financial plan and your emotional readiness to leave the workforce. Your readiness depends on whether your income covers your expenses, your Social Security benefits timing, healthcare costs, debt and how you’ll spend your time.

The traditional retirement age in the United States is typically considered 65 (67 for younger generations), but plenty of people retire before or after that milestone. Here are six signs you may be ready to retire. 

Are you ready to retire? A quick checklist

You may be ready to retire if:

1. Your retirement income can cover your expected expenses.
2. You have a plan for when to claim Social Security.
3. High-interest debt is paid off or manageable.
4. You've budgeted for healthcare and long-term care costs.
5. You're emotionally prepared to leave the workforce.
6. You have a plan for how you'll spend your time in retirement.

1. Are you financially prepared for retirement?

Being financially prepared for retirement means you have enough savings and a reliable income strategy to cover your expenses for as long as you live. This is the most important factor for most people, since you can't reach retirement readiness without adequate savings and a clear retirement plan.

“You’ve got to plan for both early and late retirement,” says LeAnn Erenberger, senior vice president and Wealth Management Advisor for U.S. Bancorp Advisors.

Given increasing lifespans, it’s not unusual for people to spend 20 to 30 years or longer in retirement. That means your retirement strategy needs to ensure that your assets last as long as you live.

Erenberger recommends creating a budget for all your expected expenses in retirement. “Then, look at the fixed income you’ll receive during retirement, such as a pension or Social Security, plus your retirement savings and other investments, to see if there’s a gap,” she says. “If there is, you may need to work longer or cut expenses.” 

Don’t forget inflation, especially with inflation rates currently elevated above the Federal Reserve’s target of two percent. “High rates of inflation can derail a retirement plan because they rob retirees of purchasing power,” says Erenberger. “What things cost today isn’t what they will cost in the future, especially the long-term future.” A solid financial plan can help anticipate these and other factors.

2. Have you decided when to start claiming Social Security?

You can start claiming Social Security retirement benefits as early as 62, but waiting until closer to 70 increases your monthly payment. There’s an eight-year window, between ages 62 and 70, to decide when your Social Security distribution strategy makes the most sense for your retirement plan.

“Claiming Social Security benefits at 62 could jeopardize your long-term financial future, especially towards the end of retirement,” says Erenberger.

More specifically, the timing of claiming Social Security can affect your monthly payment. Depending on when you begin receiving benefits, your payment may be lower or higher than if you had claimed at full retirement age (which is 66 or 67, depending on your birth year). Delaying benefits beyond full retirement age can increase your monthly payment, but those increases stop at age 70.

3. Have you paid off, or planned to pay off, high-interest debt?

Entering retirement with as little debt as possible, especially high-interest credit card debt, gives you more financial flexibility and fewer strains on your fixed income. Reducing or eliminating debt before retiring is one of the clearest signs of retirement readiness worth watching for.

Erenberger recommends carrying as little debt as possible into retirement, especially high-interest credit card debt. “Every dollar you have to spend paying down debt is a dollar you don’t have to meet your living expenses in retirement,” she says.

What about mortgage debt? Going into retirement without a home mortgage gives you a tremendous amount of financial flexibility. But Erenberger doesn’t necessarily recommend taking money out of a retirement account to pay off a mortgage early, especially if the mortgage carries a low interest rate.

“In this case, it might be better to keep the mortgage and use savings to meet retirement living expenses,” she says.

4. Do you have a strategy for healthcare costs in retirement?

You’ll qualify for Medicare coverage at 65, but Medicare isn't free, and you'll need a strategy for covering both routine and long-term healthcare costs. The monthly premium for Medicare Part B ranges from $202.90 to $689.90 in 2026, depending on income, and additional costs apply if you purchase a Medicare Advantage (Part C) or Prescription Drug (Part D) plan.

If you retire before 65, you’ll need another form of health insurance until you’re eligible for Medicare. One option is to purchase insurance on the federal marketplace at Healthcare.gov.

If you currently have a high-deductible health insurance plan, making pre-tax contributions to a health savings account (HSA) is one way to save money for healthcare expenses in retirement. Unspent HSA funds carry over from year to year, even into retirement. You can no longer contribute to your HSA once you sign up for Medicare, but you can still make tax-free withdrawals from it to pay for qualified medical expenses.

You should also have a strategy for paying for long-term care or assistance with medical or personal needs over an extended period. Nearly 70% of people turning 65 today will need long-term care at some point in their lives, ¹ and Medicare doesn’t generally cover these types of expenses. Consider whether long-term care insurance (LTCI) is a good fit for your retirement strategy.

“Investigate your healthcare options ahead of time and make sure you know what the costs will be, so you can factor them into your retirement budget,” says Erenberger.

5. Are you emotionally ready to retire?

You're emotionally ready to retire when you've made peace with leaving your professional identity behind and have a plan for building new social connections. Finances aren't the only factor in retirement readiness; your emotional readiness matters just as much.

“For many people, their job is their identity,” says Erenberger. “You have to determine if you’re emotionally ready to give this up.”

The same goes for your social circle. If most of your friendships are with people at work, start building new relationships outside of work before you retire. For example, you could make new friends in your neighborhood, at a local gym or community center or through volunteering.

6. Do you know how you’ll spend your time in retirement?

Having a plan for how you'll spend your free time is one of the clearest signs you're ready to retire. After spending 40 years or longer working full time, retirement can come as a shock if you don't know how you'll fill the hours you used to spend at work.

“Not knowing how you will spend your time can have negative health effects, both physically and emotionally,” says Erenberger.

Maybe there are hobbies you’ve always wanted to pursue but never had time for, like gardening or learning to play an instrument. Maybe you’d like to spend time volunteering at a charitable organization. Or maybe you want to travel or spend time with your children and grandchildren, if you have them. The important thing is that you have a plan for how you’ll spend the time that you used to spend working.

The bottom line

Retirement readiness involves more than reaching a specific age or savings goal. Knowing when to retire means evaluating your finances, Social Security strategy, healthcare costs, debt obligations and emotional preparedness. The more confidence you have in each area, the more prepared you'll be to make your retirement decision.

Frequently asked questions

What's a good age to retire?

There's no single "good" age to retire. Full retirement age for Social Security is 66 or 67, depending on your birth year, but your ideal retirement age depends on your savings, health coverage strategy, and emotional readiness to leave the workforce.

How old do you need to be to retire?

You can retire at any age if your finances support your lifestyle, but key retirement milestones occur at ages 62, 65, 66 to 67 and 70. These ages affect Social Security benefits and Medicare eligibility, making them important considerations when deciding when to retire.

Can I retire early, before age 65?

Yes, but retiring early means you'll need a strategy for health insurance coverage until Medicare eligibility at 65, and your savings will need to stretch across more years of retirement.

How much money do I need to retire comfortably?

The amount you need depends on your expected expenses, fixed income sources like Social Security or a pension, and how long your retirement might last. A retirement calculator can help you estimate whether your current retirement plan is on track.

How do I know if I have enough money to retire?

A retirement income strategy can help estimate whether your savings, investments, Social Security benefits and other income sources can support your expected expenses throughout retirement.

What are the signs you're not ready to retire?

Common signs include insufficient retirement savings, significant high-interest debt, no healthcare strategy, uncertainty about spending in retirement or concerns about replacing employment income.

What is the average retirement age in the U.S.?

Gallup research shows that Americans retire at an average age of about 62. ² However, retirement isn't one-size-fits-all. While knowing the average can provide helpful context, the right retirement age depends on your financial readiness, healthcare needs, lifestyle goals and long-term retirement strategy.

Ready to take the next step? Whether you're planning to retire in a few years or are evaluating your options today, a comprehensive retirement plan can help you understand your income needs, healthcare costs and long-term goals. Explore retirement planning resources designed to help you prepare with confidence.