1. Consider Your Retirement Finances
Before you can even start thinking about retirement, you need to know how much money you have now, how much you need and how you plan to spend it once you retire. You need to make sure you will be able to afford the lifestyle you want once retirement is a reality. Don't stop at considering money for basics like food and housing. If you want to take big vacations, spoil grand children or enjoy the theater, add such expenses into your financial planning.
If you plan to keep working part time after you retire, it makes sense to account for it, but don't rely on that income when you are calculating the right retirement age. Factors like illnesses can change such plans quickly.
2. Look at Your Debts Objectively
Do you owe anything besides your mortgage? If you are on a 15- or 30-year plan, you should be able to finish paying that long before retirement is a consideration. On the other hand, if you have large credit-card debts, you need to plan how to pay them off before retirement. You don't want to have to dip into your savings in order to cover past debts. Debts involving past medical bills, late student loans and even car financing should also be taken care of as soon as possible.
3. Listen to the Government
If you're trying to decide the best age to start collecting Social Security benefits, take a look at the Journal of Accountancy's online calculator. Taking into consideration your age, your health, your marital status and how much money you have saved, you should be able to calculate whether it's better for you to retire early or wait until you are eligible for full benefits. As a general rule, you're only entitled to 100 percent of benefits if you retire after 65.
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