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After years of hard work, you're certainly entitled to a happy retirement. You may have already started daydreaming about it, at least a little. Will you travel the world, volunteer for your favorite charity, go fishing every day or just spend more time with the grandkids? The post-retirement possibilities are practically endless.

However, many senior workers are actually a little afraid of retirement. Why? Because they’ve heard too many horror stories about people who retire too soon and end up outliving their nest egg. In fact, more than half (51%) of American workers say their top retirement concern is outliving their investments and savings, according to a 2016 survey from the Transamerica Center for Retirement Studies. 

So how do you know when the timing is right? Here are six signs that you’re probably ready to retire.

1. Reaching Full Retirement Age

If you were born between 1943 and 1954, your full retirement age is 66. Born after 1959? You’ll have to wait until you’re 67. Although you can start claiming Social Security benefits as early as 62, your benefits will be much higher if you wait until full retirement age. If you start your retirement benefits at 62, your monthly benefit is reduced by a whopping 30%. On the other hand, if you wait until even longer to claim Social Security  – the magic age of delay is 70 – you’ll receive 132% of the monthly benefit you would have collected at your full retirement age. After 70, there is no additional benefit to delaying your payments. (For more, see Why People Are Delaying Retirement.)

2. Being Debt-Free

If you’ve paid off all your debts, you’re well positioned for retirement. On the other hand, if you have loads of credit card debt or still owe a lot of money on your home or car, you may want to postpone retirement. A hefty mortgage or car payment can put a major strain on your finances when you’re on a fixed income. Also, if you have to dedicate a large portion of your retirement income to paying off debts, it will be more difficult to deal with financial emergencies and inflation. Before you give your retirement notice, try to whittle down most (if not all) of your debts.

"Budgeting prior to retiring to identify debts you need to eliminate before hanging up your working boots/shoes – i.e., perhaps you need to implement debt snowball payments? – is a wise path to take," says Martin A. Federici, Jr., AAMS®, MF Advisers, Inc., Dallas, Pa.

3. No Longer Financially Supporting Your Kids (and Parents)

Are your kids all grown up, out of the house and earning their own income? That makes it a lot easier to retire. However, if your kids still live with you – or you’re paying for their college education – you probably should put your retirement plans on hold. By the same token, it could well make sense to postpone retirement if you’re financially responsible for your elderly parents.

According to the Pew Research Center, nearly half (47%) of adults in their 40s and 50s have a parent age 65 or older and are either raising a young child or financially supporting a grown child (age 18 or older). One in seven middle-age adults (15%) is providing financial support to both an aging parent and a child. If this sounds like you, retirement probably isn’t realistic until your situation changes.

"Supporting aging parents or kids at home is becoming more expensive as college and housing costs continue to rise. There is no way a couple can downsize and start minimizing their expenses if they have a household to take care of," says Carlos Dias Jr., wealth manager, Excel Tax & Wealth Group, Lake Mary, Fla. (For more, see Talk to Your Kids About Your Retirement.)

4. Creating a Retirement Budget

This may seem like a no-brainer, but many soon-to-be retirees simply forget to crunch the numbers. Before you ditch your career, it’s important to figure out if you can live comfortably on your post-retirement income.

Start by adding up your must-have monthly costs, including your mortgage or rent, groceries, electricity and other utilities. Then start adding in your “wants,” such as travel, entertainment, shopping and dining out. Once you’ve calculated your estimated monthly expenses, it’s time to figure out if you’ll have enough retirement savings to cover them. Add up all your Social Security payments, pension, retirement account distributions and any other sources of income. "Your retirement budget (if you retire in your mid 60s) should not exceed 4% of your investments plus Social Security and pension payments," says Kristi Sullivan, CFP®, Sullivan Financial Planning, LLC, Denver, Colo. Do you have enough to cover your monthly expenses? If so, you may be ready to retire. (For more, see 5 Ways to Stretch Your Retirement Budget.)

5. Recently Revisiting Your Portfolio

"There are three parameters that influence one’s ability to live off one’s savings at the onset of retirement: First, the size of the savings or investment portfolio upon retiring; second, the expected growth rate of the portfolio going forward (the average annual return); and third, the amount of annual draws/consumption that the retiree is going to need to maintain this/her lifestyle (or not)," says Jeff de Valdivia, CFA, CFP®, Fleurus Investment Advisory, LLC, Fairfield, Conn.

You’ll rely heavily on your investment portfolio after retirement. If you haven’t had a portfolio checkup in a while, now is the time to do so. If your portfolio has taken a major hit in recent years, your nest egg may not be as big as you thought. This is why it’s important to sit down with your financial advisor, carefully reassess your portfolio and figure out if you need to make any adjustments. As you near retirement, you may want to shift to lower-risk investment strategies to protect your wealth.

6. Coordinating with Your Spouse

Unless you live alone, retirement doesn’t affect just you; it will have a major impact on your spouse or partner, as well. It’s a household choice, one you and your partner need to review together. One factor to discuss is how the reduction in income will affect your spouse. If he or she has to work longer to cover living expenses, it may not be fair for you to retire so soon. Plus, if your spouse intends to continue working for many years, your retirement may be much lonelier than you expected. On the other hand, if you and your spouse are both financially and emotionally ready for it, you’ll be more likely to enjoy a fulfilling retirement together. Coordinate your plans and try not to retire at exactly the same time, as Retirement: The One Thing Couples Shouldn't Do Together points out.

"Communication is always important, especially when it comes to your household finances. Being on the same page in terms of your retirement plan will help bring you peace of mind about transitioning into your next phase in life," says Mark Hebner, founder and president of Index Fund Advisors, Inc., in Irvine, Calif., and author of "The 12-Step Recovery Program for Active Investors."

The Bottom Line

These are just a handful of the signs that you’re ready for retirement. You should also consider a number of other factors, such as how you’ll spend your days, where you plan to live, and whether or not most of your friends will still be working. All of these things could have a major impact on your overall enjoyment of retirement. As already discussed, before you make any sudden moves, be sure to consult with your financial advisor and work through the timing and any changes that will be needed.

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