3 Signs You Should Put Off Retirement for a While Longer

It's normal to be eager for retirement, especially after finishing up yet another day at the same 9-to-5 job you've been at for decades. You might have your retirement date marked on your calendar already, but it's a good idea to do a reality check before you actually give your notice.

Though you may not want to prolong your stay in the workforce, you probably should if any of the three things below apply to you.

1. You don't know how much you need to retire comfortably

Retirement is a decision you don't want to have to reverse later on, so it's crucial to make sure you have adequate savings before you quit your job. How much you'll need depends in part on how long you expect to live and the lifestyle you want to have in retirement.

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If you haven't already done so, think about how you want to spend your retirement and what you anticipate your annual expenses to be. If you plan any trips or large, one-time purchases, don't forget to include these as well. Then, think about how long you expect your retirement to last so you know how many years of savings you'll need.

Finally, don't forget about inflation. It's driving up costs quicker than normal right now, but it's always a part of life. Typically, a 3% annual inflation rate is a good assumption for retirement planning.

Even if you've already done all this number-crunching in the past, it's a good idea to do it again just before you retire to make sure you're still on track for your goals. If something's a little off, consider delaying retirement until you've saved enough.

2. You know you don't have enough money saved up

If you know you don't have adequate savings, retiring isn't a good idea, even if you really want to. You might be able to cover your expenses for a short time, but when the money runs out, you'll have to rely upon family members or risk winding up in debt. You're better off remaining in the workforce until you've been able to save enough.

This might not be as challenging as you think. By delaying your retirement, you're giving your existing savings more time to grow. But you're also shortening the length — and cost — of your retirement.

You might be able to reach your goal even faster by cutting some planned expenses from your budget, like trips. But it's best not to rely upon this strategy alone. Unexpected costs will sometimes arise, and you can't always be sure that you'll be able to keep your expenses low.

Another option you might consider if you're not comfortable with delaying retirement is a gradual transition to retirement. Rather than quitting all at once, slowly decrease your hours over time. This way, you'll have some money coming in from a paycheck to help you with your expenses. But you'll also have more free time to spend on hobbies.

3. You have a ton of debt

Retiring with debt isn't always a problem, but it definitely increases your risk of financial insecurity. That's especially true for those with high-interest credit card debt. This can eat up your savings quickly, even if you're making more than the minimum payment every month.

Whenever possible, try to pay off your high-interest debt before you retire. A balance transfer card or a personal loan work well for this. But you can also trim your expenses and put any extra savings you have toward your debt until it's paid off. Make this your top priority, even above retirement savings.

If you have other types of debt with lower interest rates, like a mortgage, paying it off before retirement isn't as crucial. But if you carry that debt into retirement, make sure you've budgeted for it. You may also want to consider refinancing to see if you can score a lower interest rate.

Only you can decide when it's time to retire. But if you want the most enjoyable retirement possible, you need all your financial ducks in a row first. Take stock of your current finances and look over your retirement plan again. It shouldn't take you too long, and it can help you feel confident that you've done all you can to prepare for your future.

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