Not sure you can retire? Well, maybe this short list that I was thinking about the other day might help you out. Here are my signs you can probably retire, now, or you need to wait.
- Your investment income from your portfolio exceeds your expenses, and then some.
- You have no debt entering retirement or you could easily pay off debt before retirement if you really wanted to.
- You don’t worry about a 30% stock market decline that could negatively impact your portfolio.
- You don’t worry about interest rates or bond yields anymore.
- You couldn’t care less about prolonged bear markets and what it does to your portfolio.
- You don’t tinker with your portfolio.
- You have a juicy workplace defined benefit pension plan with at least 30 years in the bank.
- You don’t care about house prices; there is no need to finance your retirement by selling your home.
- You’ve done the math and you already know you can (retire) based on a 3% safe withdrawal rate from your portfolio.
- You’re not relying on Canada Pension Plan (CPP) or Old Age Security (OAS) to cover expenses, income from these programs is considered retirement “fun money”.
- Most of the above.
- All of the above – what the heck are you waiting for???
The keys from this list for us are #1 and #2. Once our projected cash flow from investments exceeds our expenses AND all debt is gone, we’ll consider part-time work or maybe even calling it a day from the workforce. Until then, we save, we invest and we have some fun with what’s leftover.
How do you know you can retire (or you need to wait)? What items would you add to my list?