Being ready to retire means more than being ready to stop waking up at 6:00 a.m. to put in long hours at a job you’re not thrilled about. If it were that simple, most of us would retire at 25. What it really takes to retire is a solid grasp of your budget, a carefully considered investment and spending plan for your life savings, debt that’s under control and a plan you’re excited about for how you’ll spend your days. With that in mind, here are ten signs you might not be ready to retire yet.

1. You’re Struggling to Pay Your Bills

Randall Greene, a financial advisor and CEO of Greene Financial Management in Altadena, Calif., says he recommends that his clients plan to live off about 75% of their pre-retirement income during retirement in order to maintain a similar lifestyle. The 75% figure is a general rule that assumes reductions in expenses like no longer contributing to a retirement account, no longer saving for a child’s college education and no longer having job-related expenses such as commuting and a work wardrobe.

However, that figure might be lower or higher depending on the taxes you’ll pay on your retirement account withdrawals and how you plan to spend your retirement.

“If someone plans to travel through Europe and take luxury cruises, that person is going to need significantly more than someone whose hobbies include reading and gardening,” Greene says.

“If you are struggling to pay your bills now, how will you pay your bills if you only receive 75% of what you currently make?” he says. “While a lot of people tend to spend less as they get older, they need to take into account that some other expenses might increase during their retirement, such as healthcare costs.”

2. You Have Lots of Debt

“Large amounts of debt will severely strain your savings once you retire,” says David Walters, a certified financial planner and portfolio manager with Palisades Hudson Financial Group’s Portland, Ore., office. “If you can, reduce or eliminate credit card payments and car loans. Depending on your situation, paying off your mortgage or downsizing may also help in the long run,” he says.

Paying down debt before you retire might mean working more years than you’d like, but it will be worth it for the sense of ease that comes with not having all those monthly payments hanging over your head. Getting rid of debt also means getting rid of interest payments that can take a real toll on your long-term finances. (For further reading, see How Mortgage Debt Can Derail Retirement.)

That being said, it’s tough to know what the best use of your money is when you’re facing a choice between putting that money in your retirement account and investing it or paying down debt. (For more, check out To Invest or to Reduce Debt, That’s the Question.) For any loan with an interest rate equal to or higher than what you’re likely to earn in the market – say, 6% – you’ll get the best return, and a guaranteed one at that, by paying off your debt. If it’s a choice between paying 3% in tax-deductible mortgage interest and saving more for retirement, the latter is probably the smarter option, unless you have a poor investing track record.

3. You Haven’t Tackled Major Expenses

You don’t want to wait until you’ve retired to address major, foreseeable expenses such as replacing your roof, repaving your driveway, purchasing a vacation home or buying a new car, says Pedro M. Silva, a financial advisor and chartered retirement planning counselor with Provo Financial Services in Shrewsbury, Mass. “These larger expenses can add up, especially when funds are withdrawn from taxable accounts and taxes need to be paid on every dollar.”

“We encourage clients to tackle large expenses before retirement because the impact to their portfolio can be significant,” he says. Suppose you need a new roof ($7,000), a new driveway ($4,000) and a new car ($10,000 down and $300 a month). These purchases, which require $21,000 up front, mean that you have to take $28,000 in pre-tax withdrawals from your retirement account if you’re in the 25% federal tax bracket, Silva explains. Plus, the $300-a-month car payment will cost you $400 a month in pre-tax dollars, and that could represent a significant chunk of your monthly Social Security income.

4. You Don’t Know What You’ll Get From Social Security

While you might not be relying on Social Security to meet most of your expenses, you shouldn’t ignore it, either.

“Most people expect to get something, but they have yet to estimate how much it will be,” Greene says. “The Social Security Administration offers a handy tool to help you make that calculation.”

Walters adds that if you haven’t reached full retirement age for Social Security – the age at which you can collect your maximum Social Security monthly benefit – you might want to postpone retirement.

If you start claiming Social Security as early as age 62, your monthly checks will be 30% smaller than if you wait until you reach full retirement age. If you keep working those three or four extra years, not only will you receive a larger payment each month just for waiting, you might further increase your payment by adding more high-earning years to your benefit calculation. You’ll also, of course, have a few more years of paychecks to squirrel away for retirement. (Read more in Should You Delay Your Retirement?)

5. You Don’t Have a Monthly Financial Plan

“Once you retire, paychecks stop arriving but bills keep showing up,” Walters says. You need to map out your monthly cash flow before you retire, he adds.

Planning your monthly cash flow means considering when you will start drawing Social Security benefits and how much you’ll receive, as well as how much you’ll withdraw from your personal retirement accounts and in what order. If you have both a traditional IRA and a Roth IRA, for example, you have to think about the taxes and required minimum distributions (RMDs) on your traditional IRA withdrawals and how that affects your Roth IRA withdrawals, which won’t be taxed and aren’t subject to RMDs. (Learn more in 6 Important Retirement Plan RMD Rules.)

Having a monthly plan also means having a solid grasp of your expenses, says certified financial planner Kevin Smith, executive vice president of wealth management for Smith, Mayer & Liddle in York, Pa. Ideally, you should have two to three years of actual spending history summarized by category, he says, and you should analyze each category to determine how it might change during retirement. “Some expenses may go down, such as debts that may soon be repaid, whereas others, such as healthcare costs or travel and recreation expenses, may go up,” he says.

Knowing what your likely expenses will be means knowing how much income you’ll need. Once you know how much income you need each month, you can assess whether your nest egg is large enough to allow you to retire, or whether you need to keep working and saving and/or cut your anticipated retirement expenses.

6. You Don’t Have a Long-Term Financial Plan

“You should understand how long your savings will last and what spending level you can maintain over the coming decades,” Walters says. “No one knows exactly how long they will live, but bear in mind that expanding life spans and the increasingly high costs of long-term care may mean your portfolio will have to last longer and stretch further than you once thought.”

There’s debate about how much you should withdraw from your portfolio each year. There’s the 4% rule, which says you can tap 4% of your retirement assets each year as long as the rate of return on your investments is at least 4% annually. Your money should last at least 30 years this way.

And you do need to plan for your retirement years to last 30 years or more, Smith says. “Based upon actuarial statistics, for a couple retiring at age 65 there is a 50% probability that at least one will be living at age 92 and a 25% probability at least one will be alive at age 97.”

Some say the 4% rule is no longer safe because modern investment returns are lower than they were when the rule was developed in 1994. They suggest a lower rate, such as 2.8%, as a safe withdrawal rate to avoid running out of money prematurely.

Depending on your health, your portfolio composition and your risk tolerance, you’ll need to come up with a plan for what percentage of your assets you’ll spend each year – which might mean getting help from a professional financial planner.

7. You Haven’t Thought About Inflation

Inflation will affect your day-to-day expenses as well as the value of your life savings.

An inflation rate of 3%, Smith says, which is close to historical norms, would mean that your expenses will double in less than 25 years – well within a typical retirement period. Overlooking the effects of inflation is one of the most common retirement planning mistakes and can have serious long term implications if not properly accounted for, he says.

With average life spans much longer than they used to be, you need to manage your money carefully to keep up with or outpace inflation to reduce your chances of outliving your savings. Treasury Inflation Protected Securities (TIPS) will preserve your capital by paying enough interest to keep up with inflation and are considered extremely safe because they’re backed by the government.

If you want to earn investment returns that outpace inflation, look to stocks. Keep in mind that an 8% annual return is really only a 5% annual return after 3% inflation. Avoid keeping a lot of your nest egg in cash and cash equivalents, like CDs and money market funds. Their interest rates are so low that you’ll be losing money. In the short term, you might not notice, but in the long term, you could run out of money sooner than you expected. (Learn more in Your Retirement vs. Inflation)

8. You Haven’t Rebalanced Your Portfolio

“A lot of people take a passive approach to investing. They set it and forget it,” Greene says. But as you get older, adjusting your portfolio for the appropriate level of risk is key.

“When you are younger, you can afford to have your portfolio in accumulation mode, because you have time to make up any hits your portfolio takes,” Greene says. “As you get closer to retirement, you’ll want to have a strategy that focuses on income generation and asset protection.”

The accepted wisdom about how retirees should manage their portfolios consists of diversifying, preserving capital, earning income and avoiding risk. Diversifying across a variety of investment types and asset classes – bonds, stocks, healthcare, technology, and so on – helps protect your portfolio’s value when the market declines, since one instrument or asset class might be performing well when another isn’t. Capital preservation means choosing investments that aren’t too volatile, so your portfolio value doesn’t fluctuate wildly. Dividends from stocks of big, established companies that have a long track record of performing well (or dividends from an index fund or exchange-traded fund made up of such companies) can provide a dependable income stream. And if you’re diversified and staying away from volatile investments, then you’ve taken care of the risk avoidance objective. (Learn more in Rebalance Your Portfolio to Stay on Track.)

9. Retirement Worries You

“Even if your portfolio is in top shape, you may not be mentally ready to let go of your working life,” Walters says. “Working takes up a lot of energy, and some people may be anxious, rather than excited, to consider months and years of unstructured time ahead.”

If this sounds like you, think about pursuing a “second act” venture, working part-time or becoming a volunteer for an organization you care about, Walters says. “If you just retire without a plan, however, you can overspend in an effort to combat boredom and run through your savings quicker than you planned.” (For related reading, see Why to Start Your Own Business During Retirement.)

10. You Love Your Job

There’s nothing that says you have to retire just because you’ve reached Social Security’s definition of full retirement age. Just look at Warren Buffett, who’s still working at 85 and has no plans to retire. He does it because he loves picking stocks – not to pad his $76.1 billion in net worth.

“If you wake up every morning and go to sleep every night excited about your job and what you get to do for a living, it is likely you are not ready to retire, and that is OK,” Greene says. “Continue living your life and enjoying every minute of it.”

Working has benefits beyond the financial. A job you enjoy engages your mind, offers social interaction, gives your days purpose and creates a sense of accomplishment. All of these things can help you stay healthy and happy as you age. You might also be able to stay on your employer’s health plan and possibly get better coverage than you would through Medicare.

The Bottom Line

“The primary sign that you aren’t OK to retire is when you can’t answer the question, ‘Am I OK to retire?’” Smith says. “Retirement is a major life transition that requires ample preparation and planning.”

If you discover you aren’t fully prepared, Greene says, you can address the problem by sitting down with a financial advisor to create a financial plan that will help you pay down your debt, know how much income you will need during retirement and properly rebalance your portfolio. (For further reading, see A Pre-Retirement Checkup.)

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.