The financial test is the easy one. These are the signals most retirees miss.
Prepared for pre-retirees within 24 months of a potential retirement date.
Most articles about retirement readiness focus on a single question, “have you saved enough?” But that may be the wrong question — or at least, only half of the question.
By the time you’re asking whether you’re ready to retire, you’re usually near your savings goal. What’s harder to determine is whether the rest of your life is ready, too. What about your identity, daily structure, tax planning, healthcare, relationships, and the simple fact that you will wake up Monday morning with no place to be?
At WLTH Management, we run a readiness checklist with six signals for our clients in the 24 months before retirement that matter more than just the account balance.
Signal 1: You’ve Completed the Tax Structure, Not Just the Savings
Saving for retirement is just the first step, next is finding a structure that works for you and your household.
Before you retire, have you:
- Evaluated your company stock in your 401(k)?
- Considered whether Roth conversions make sense for you?
- Created a plan for highly appreciated or concentrated stock?
- Mapped out your expected tax brackets for the first five years of retirement?
These decisions matter because the first 5–10 years of retirement can create important tax-planning opportunities. Depending on your circumstances, those may include Roth conversions, capital gains harvesting, and decisions about when to begin Social Security.
The goal is to create a tax-efficient strategy for turning your wealth into retirement income.
Signal 2: You Have a Clear Answer to “What Will You Do on Tuesday?”
The most common retirement regret we hear isn’t financial, it’s structural. Five days a week of unclaimed time turns out to be much heavier than five days of vacation.
Retirees who thrive almost universally have an answer to: what will I do with the first Monday morning? The second? The Tuesday after that?
That answer doesn’t have to be a calling. It can simply be a routine, like a recurring lunch, becoming a board member, the grandkids on Wednesdays, a tennis ladder, or starting a part-time consulting practice. But, it has to exist BEFORE the retirement date. Building your new schedule from zero on day one is much harder than people expect.
Signal 3: Healthcare Is Solved, Not Assumed
Healthcare is one of the biggest financial variables in retirement. Yet, many haven’t modeled their costs across the gap years or under-estimated by 30-40%.
If you’re retiring before 65, what will your health insurance look like before Medicare? COBRA for 18 months, ACA marketplace plan, or a spouse’s employer plan? Have you priced the premium options?
If you’re retiring at or after the age of 65, have you walked through your choices? Medicare + Medicare versus Medicare Advantage? Did you know that for higher-income retirees, IRMAA Medicare surcharges can add $4,000- $7,000 per year per spouse.
Signal 4: Know What Income You Actually Need
Most pre-retirees confuse current spending with retirement spending. They’re different.
Subtract your mortgage, savings contributions, payroll taxes, work-related expenses, kids no longer dependent, and add healthcare premiums (often the largest line item from 60-65), travel, hobbies, home maintenance for a house you’re now in 16 hours a day instead of 8.
The total number is rarely 70% of your current income (the common rule of thumb). For affluent households we work with, it’s often 80-110% to start. The first five years are usually the most expensive, with travel and active retirement spending.
Signal 5: Your Spouse is on the Same Page
This one matters more than people admit. Many couples have never had an explicit conversation about what they want retirement to look like:
- Where will you live?
- How much will you travel?
- How much time do you want to spend together?
- What will each of you do independently?
One of the most common sources of stress we see in the first 18 months of retirement is that two people have been planning for the same retirement financially — but imagining very different lives.
Have the conversation now. Write it down. Compare lists. Where are the gaps?
Signal 6: Your Estate Plan Is Current
Documents older than five years often have stale beneficiary designations, outdated trust structures, and successor trustees who are no longer the right choice. Meaning, it’s time to update!
Before retirement, confirm:
- Wills and revocable trusts have been reviewed in the last 3-5 years
- Beneficiary designations are in place on every IRA, 401(k), and life insurance policy
- Powers of attorney and healthcare directives are named
- Trust assets are properly titled, if applicable
If your wealth has grown substantially during your earning years, then the estate plan written ten years ago is likely no longer the right plan.
The Honest Test
If you can answer the following without hesitation, you are most likely ready for retirement:
- I know what I’ll do on Tuesday.
- My spouse and I have the same picture of the first three years.
- My Wealth Advisor has run my tax brackets for the next 10 years.
- My healthcare plan is priced, not assumed.
- My estate documents are current.
- I have a written income plan and I trust the math.
If two or three of those questions give you pause, that doesn’t mean you’re not ready to retire. It means you know where to focus next. Retirement readiness is not a single number or a finish line you cross on a specific date. It’s the confidence that the major pieces of your financial life — and your life beyond work — are ready to move forward together.
For those within 24 months of a possible retirement date, WLTH Management can help evaluate the gaps and build a clear plan for what comes next. Schedule a conversation with WLTH Management now.
This document is for educational purposes only and does not constitute tax, legal, or investment advice. WLTH Capital Management, LLC is a registered investment advisor. Strategies discussed may not be appropriate for all investors. Please consult your tax advisor and financial advisor on application to your specific situation.