How Do I Know When I'm Ready to Retire?

Jul 10

A woman looks over a financial statement. What determines retirement readiness? See the 6 questions Kevin Lum asks clients to gauge real retirement readiness, financial and emotional.

Sitting across from financial advisor Kevin Lum on a Zoom call recently, a client asks: "I think I'm ready. But how do I actually know?"

Kevin hears some version of that question constantly. People know they want to retire. They just don't know how to know if they should. So they work another year. Then another. Then another — not because they're building toward something, but because the question never got a clear answer.

Most retirement content doesn't help. It gives you a savings target and calls it a framework. But in Kevin's experience working with hundreds of clients, the number is rarely what's actually holding people back. The real obstacles are harder to put in a spreadsheet.

In his video "If You Can Answer Yes to Most of These, You're Ready to Retire", Kevin walks through the six questions he actually asks clients — and explains why readiness is equal parts financial and emotional. Below, we've built that into a framework you can work through yourself.

The Six Questions That Actually Determine Retirement Readiness

Work through each question honestly. These aren't designed to give you permission to retire or to keep you working — they're designed to surface what's actually going on.

1. Is Your Health Suffering Because of Work?

Stress-related health issues — chronic pain, high blood pressure, sleep problems, persistent anxiety — are easy to normalize when you've been managing them for years. But they're worth examining honestly.

Consider: if you've been in physical therapy for months, or you're managing a condition that seems to flare up around work deadlines, the cost of continuing may be higher than it appears. If you're earning $120,000 a year but spending $8,000 on health costs tied to workplace stress, the net picture looks different.

This isn't about retiring because you had a bad week. It's about recognizing when work is consistently costing you something that money can't fully replace.

Ask yourself: Would my health improve meaningfully if I stopped working?

2. Have You Been Postponing Your Life?

Most people in their late 50s and early 60s have a mental list — things they've been meaning to do for decades. Travel they've deferred. Skills they want to develop. Time with aging parents or grandchildren that keeps getting pushed.

The honest question isn't whether you want to do those things. It's whether you could realistically do them while still working, or whether the job is the actual obstacle.

There's also a timing reality worth facing: if you're 65 now, you may have 15 to 20 truly active years ahead — years where you can hike, travel internationally, and engage physically with the things on your list. That window is finite, and it shifts.

Ask yourself: Is there something I've been waiting to do that I genuinely cannot do while working?

3. Do You Know Who You Are Outside of Work?

This is the question most retirement checklists skip entirely — and it may be the most important one.

When your identity is built around your title or your role, retirement doesn't just change your schedule. It changes how you answer the question "who am I?" Research has found that roughly 41% of retirees experience significant identity disruption in the first year after leaving work. A long-running Harvard study on happiness found that the biggest challenge retirees faced wasn't financial — it was replacing the social connections that work had provided.

None of this means you shouldn't retire if you're uncertain. It means this is the work to do before you go: figure out where your sense of purpose and connection will come from. A community you're involved in. Relationships outside the office. A project or cause that matters to you.

Ask yourself: If someone asked what I do and I couldn't mention my job, what would I say?

4. Can You Financially Afford to Stop Working?

Yes, this matters — but probably not in the way most people frame it. The question isn't whether you've hit a specific savings target. It's whether your income sources can sustainably cover your actual expenses.

Start with three numbers:

Essential monthly expenses — housing, food, healthcare, utilities — the non-negotiable baseline
Guaranteed income — Social Security, pensions, annuities — money that arrives regardless of market performance
The gap — what your portfolio needs to generate to cover the difference

Here's a simple example of how that math works in practice:

Essential monthly expenses: $7,000
Social Security at 67: $2,400/month
Gap your portfolio needs to fill: $4,600/month ($55,200/year)
Portfolio needed at 4% withdrawal rate: ~$1.38 million

If you have $1.5 million saved, you're likely in range. If you have $900,000, there's a real gap worth planning around — whether that means adjusting your timeline, reducing expenses, or optimizing your Social Security timing to close it.

Expenses in retirement don't stay static either. Early on, they often run higher — you're traveling, you're active, you're catching up on deferred plans. Over time, many fixed costs drop: the mortgage is paid off, you're not commuting, you're no longer contributing to a 401(k). Later, healthcare costs may rise again. Planning for that curve — rather than a flat number — gives you a more accurate picture.

If you want to run your own numbers, Kevin offers free 30-day access to the same financial planning software he uses with clients — you can find that here. You can also use our 5-Minute Retirement Plan Calculator to get a quick read on where you stand.

Ask yourself: Have I actually mapped out my income, expenses, and withdrawal strategy — or am I operating on a rough estimate?

5. Do You Know What You'll Actually Do All Day?

This is where the difference between "wanting to stop working" and "being ready to retire" becomes clear.

The first few weeks after retirement often feel like a long weekend. By month two or three, without structure, many people hit a wall. Research suggests roughly one in three retirees experience depression or a significant low after leaving work — not because retirement is bad, but because they hadn't planned what they were retiring to do.

The average retiree gains around 2,500 additional leisure hours per year compared to their working life. That's roughly equivalent to a full-time job's worth of time — except no one is telling you what to do with it.

The retirees who report the highest satisfaction tend to have a loose structure: regular commitments, social touchpoints, physical activity, and at least one ongoing project or pursuit. It doesn't need to be a packed calendar. But it does need to exist.

Ask yourself: If I retired next month, what would a typical Tuesday look like six months in?

6. Are You Working Because You Want To — or Because You're Afraid Not To?

There are excellent reasons to keep working: you love what you do, it gives you purpose, and you're building toward something specific. Fear is not one of them.

A pattern that shows up often among analytically-minded, high-achieving people: they've run every scenario, consulted multiple advisers, built detailed models — and they still can't pull the trigger. Not because the numbers don't work, but because making the decision feels irreversible. So they keep working. Not from joy or intention, but from inertia.

A useful gut-check: if your financial security were guaranteed, would you still go to work tomorrow? If the honest answer is yes — because you genuinely love it — that's a good reason to stay. If the honest answer is no, it's worth asking what's actually keeping you there.

Ask yourself: Am I working by choice, or by default?

Your Retirement Readiness Checklist

Use this as a quick self-assessment. Answer honestly — this is for you, not a test.

☑ Six Questions to Ask Before You Retire

1. My health is suffering in ways that are clearly tied to work stress.

2. There are specific things I want to do that I cannot do while working.

3. I know who I am and where I find meaning outside of my job.

4. My income sources can sustainably cover my expenses — I've done the math.

5. I have a realistic vision for how I'll spend my time, not just what I'm leaving.

6. I'm working by choice, not because I'm afraid to stop.

If you answered yes to 4 or more: You're likely closer to ready than you think.

If you answered yes to all 6: It may be time to stop waiting.

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Watch the Full Breakdown

Kevin walks through each of these questions in detail — with real client examples — in his video "If You Can Answer Yes to Most of These, You're Ready to Retire". If you're working through this question seriously, it's worth the watch.

You'll also find links in the video description to his 5-number retirement framework and free planning software access.

Ready to Talk Through Your Specific Situation?

Answering these questions on your own is a great starting point. But retirement decisions involve enough moving parts — Social Security timing, healthcare coverage, withdrawal sequencing, tax strategy — that most people benefit from working through them with someone who can look at the full picture.

Kevin's firm works with people navigating exactly this moment: close enough to retirement to take it seriously, but not sure whether now is the right time. As a fiduciary, his advice is structured around your situation, not a product.

Book a Free Retirement Readiness Strategy Session

A 30-minute conversation to look at your numbers, your timeline, and whether retirement makes sense right now.

No cost. No obligation. No sales pitch.

Schedule Your Session →

The Questions We Often Get on Retirement Readiness

How much money do I actually need to retire?

There's no universal number, and that's not a cop-out. The right amount depends on your essential monthly expenses, what guaranteed income you already have coming in (Social Security, pensions, annuities), and what your portfolio needs to generate to cover the gap. A common rule of thumb is the 4% withdrawal rate, but your situation may support more flexibility or require more conservatism depending on your health, timeline, and spending patterns. The better question isn't "how much do I need?" — it's "can my income sources sustainably cover my actual expenses?"

What is the best age to retire?

There isn't one. Retirement age is a function of your financial readiness, your health, your identity outside of work, and whether you actually have something to retire to. Some people are genuinely ready at 58. Others are still finding meaning and purpose at 70 and have no reason to stop. The six-question framework above is a more useful guide than any age target — because the right time to retire is when you can say yes to most of those questions, not when you hit a birthday.

What if I'm not sure I have enough saved?

Start by getting specific. Most people are operating on a rough estimate rather than an actual plan. Map out your essential monthly expenses, add up your guaranteed income sources, and calculate what your portfolio needs to contribute. You may find you're closer than you think — or you may find there are specific gaps worth addressing before you leave. Either way, clarity is more useful than anxiety. Kevin offers free access to the same planning software he uses with clients — you can find the link in the video description.

How do I avoid getting bored in retirement?

The retirees who struggle with boredom are usually the ones who planned their exit but not what came next. The fix isn't to stay busy for the sake of it — it's to build some structure before you leave. That means identifying a few anchor commitments (a volunteer role, a standing social activity, a class or project), not just a list of things you might do someday. Think about what a normal Tuesday looks like six months in, not just the first month when everything still feels like a vacation.

Should I talk to a financial adviser before I retire?

For most people, yes — particularly if you have questions about Social Security timing, healthcare coverage before Medicare kicks in, how to draw down different account types in a tax-efficient order, or how to structure a reliable income stream from a portfolio. The value isn't just the plan itself; it's having someone look at your actual numbers and tell you whether your concerns are rational or whether you're holding yourself back unnecessarily. If you work with anyone, make sure they're a fiduciary — meaning they're legally required to act in your interest, not earn a commission.

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

The clearest sign is that you're retiring from something rather than to something. If your main motivation is escaping a bad boss, burnout, or a frustrating workplace, those feelings are valid — but they're not a retirement plan. Other signs worth paying attention to: you haven't mapped out your actual monthly expenses, you're unclear on when you'll take Social Security, you don't have healthcare coverage figured out for the gap before Medicare, or you genuinely can't picture what a normal Tuesday looks like six months in. None of these are reasons to delay forever, but they're worth resolving before you hand in your notice.

How do I know if I have enough saved at 60?

At 60, the honest answer depends less on a specific number and more on three things: what your essential expenses actually are, what guaranteed income you'll have coming in, and how long you need your portfolio to last. A 60-year-old retiring early may need their savings to stretch 30 years or more, which changes the math significantly compared to someone retiring at 67. Common withdrawal rate rules of thumb become more conservative at earlier retirement ages for exactly that reason, and your specific situation may support more flexibility or require more caution depending on your health, timeline, and spending patterns. The most useful thing you can do at 60 is stop estimating and start mapping — actual expenses, actual income sources, actual gap. That conversation is also worth having with a financial advisor who can stress-test your numbers against different scenarios.

What's the difference between financial readiness and emotional readiness for retirement?

Financial readiness means your income sources can sustainably cover your expenses — the math works. Emotional readiness means you know who you are outside of work, you have something meaningful to retire to, and you're making the decision from intention rather than fear or inertia. Most retirement content only addresses the first one. But in practice, the people who struggle most in retirement aren't the ones who ran out of money. They're the ones who didn't plan what came next. Both dimensions matter, and both are worth working through before you make the call.

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