How to Know If You’re Truly Ready to Retire
Understanding What “Enough” Really Means
Many Americans approaching retirement ask the same question:
“Do I have enough to retire?”
It’s the question financial planners hear more than any other — and the answer is rarely as simple as comparing your savings balance to a chart or rule of thumb.
In a recent discussion, Dana Anspach, founder of Sensible Money, explained why retirement savings benchmarks can be a helpful starting point, but not a full picture.
The only way to know with confidence whether you are ready to retire is to evaluate your income sources, spending needs, tax situation, investment allocation, and lifestyle goals within a structured retirement income plan.
Why Rules of Thumb Are Only a Starting Point
Several major financial firms publish retirement savings targets.
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T. Rowe Price suggests that by age 65, retirees should have roughly 11 times their salary saved.
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Fidelity recommends about 10 times salary by age 67.
These benchmarks can serve as useful signposts, Anspach said — especially for workers in their 40s and 50s who want to check whether they’re on track.
“I like anything that helps people head in the right direction,” she said.
However, she also cautioned that these numbers can lead to discouragement for those who fall short.
“If I’m already there and I don’t have that amount saved, what do I do? Do I simply feel hopeless? That’s not good,” she said.
More importantly, these benchmarks fail to account for real-life financial complexity. Many retirees:
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Expect an inheritance
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Own real estate or investment property
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Receive a pension
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Plan to continue part-time work
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Expect spending needs to change dramatically over time
Each of these factors can materially alter how much someone truly needs to retire comfortably.
The Only Accurate Answer Comes from a Detailed Plan
When someone asks whether they can afford to retire, Anspach’s firm performs a data-driven financial analysis — documenting assets, liabilities, spending patterns, and taxes, then building a customized retirement income strategy.
“We ask for a ton of data,” she said.
For example, knowing that someone has a $1 million brokerage account isn’t enough. A planner also needs to know the cost basis to determine how taxable withdrawals will be — which affects both the size and timing of distributions.
The same principle applies to IRAs and 401(k)s: the order of withdrawals can affect tax rates, Medicare premiums, and even how long the portfolio lasts.
Behavior Matters as Much as Math
Two retirees with identical portfolios may require very different strategies based on risk tolerance and spending comfort.
Some retirees want to maximize their “go-go years” and are comfortable drawing down principal. Others prefer to preserve account balances, even if they could safely withdraw more.
“A good plan reflects both the numbers and someone’s psychological comfort level,” Anspach said.
The Case for Working With a Financial Planner
Some retirement savers enjoy creating spreadsheets and researching tax strategies — for them, a DIY approach may work. But many people are natural delegators: they want to understand the strategy, not manage the details.
“If that’s not you, then a planner is worth their weight in gold,” Anspach said.
The value lies not only in designing the plan but also in adjusting it as life changes.
Once a retirement income strategy is in place and validated, stress levels often decline sharply. Anspach said many clients report “significantly greater peace of mind” after completing the process.
Author Fritz Gilbert described his own transition this way:
Before retirement, he worried about money “90% of the time.” After developing a clear plan, that worry dropped to “10%.”
What About AI Planning Tools?
AI-based financial planning tools are evolving quickly, but they still require human oversight, Anspach cautioned.
“What terrifies me is that I know enough to know when the answer is wrong,” she said.
In her experience, common AI tools sometimes return inaccurate answers on tax, investment, or retirement distribution questions.
Her takeaway: AI can help organize data, but it shouldn’t replace professional guidance when making financial decisions.
Why Facing the Numbers Matters
For many people, the hardest step in retirement planning is simply starting.
“People are often scared to take a look at the question,” Anspach said.
They fear discovering shortfalls or needing to make difficult changes. But nearly everyone who goes through the process reports relief and clarity.
“I know what to do now,” she said.
And that — understanding your options and next steps — is the true definition of being ready to retire.