--- title: Can You Afford to Retire? description: Thinking about retiring? Here's how to determine if you have enough saved and what expenses to plan for. authors: - name: Kat Tretina role: Contributor url: https://money.com/author/kat-tretina/ education: B.A in English and Communications from Elizabethtown College, M.A. in Communications from West Chester University at_money_since: 2025 articles: 32 covers: - Retirement - Banking - Insurance - Loans former_staff: true editors: - name: Andrea Agostini Ferrer role: Lead Staff Writer url: https://money.com/author/andrea-agostini/ bio: Andrea has been writing for Money Group since 2020. Her articles, which have been featured across a wide variety of publications, have helped our readers navigate multiple areas of personal finance including credit, loans and insurance. She's currently part of our team of insurance experts, specializing in travel and pet insurance. education: University of Puerto Rico at_money_since: 2020 articles: 62 covers: - Retirement - Banking - Business - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Shopping - Taxes published: '2026-11-06T15:37:31.000Z' modified: '2026-11-06T16:05:08.000Z' section: Retirement tags: - retirement planning - Sponsored - sponsorship word_count: 1222 canonical: https://money.com/can-you-afford-to-retire/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Senior woman looking at her mail at home.](https://img.money.com/2026/08/Explainer-Afford-Retirement.jpg) Sponsored by: ![](https://s3.consumersadvocate.org/prd/image/image/41219/52d5d394-57ec-462a-bdc0-11fe84d3ace0.webp) Retirement isn't just a destination. It's a plan for what's possible with New York Life. [Go to NewYorkLife.com](https://money.com/pr/l96a43a4dad7?ap_referrer=%2Fcan-you-afford-to-retire%2F&apxa1=homepage) ## Key Takeaways - A common benchmark for retirement is to save 25 times your expected annual expenses, but everyone's situation is unique and a personalized strategy is key. - The average retirement age is 65 for men and 63 for women, according to the Center for Retirement Research at Boston College. - Working with a financial professional makes a significant difference in people's outlook on retirement. Among people who work with a financial advisor, about a third (31%) say they feel prepared for retirement, compared to 8% of those who didn’t, according to New York Life's latest Wealth Watch Survey. Retirement looks different for everyone: Some may want their retirement income to fund a life of travel and adventure; others may just want enough money to be comfortable and spend time with their loved ones. But all retirement plans have one thing in common: they require careful planning. Here's how you can figure out whether you are ready to retire and key factors to keep in mind before you put in your papers. ## Are you ready to retire? 3 questions to ask yourself Before you start planning your farewell party at work, ask yourself these questions to make sure your finances match your retirement goals. ### What will my retirement expenses be? As you develop a retirement budget, review your current monthly expenses. Costs related to your work, such as commuting or office clothes, may decrease, but your spending may increase on things like entertainment, doctor's visits and home repairs. Factor in how your expenses may change in the coming years, too. For example, you may have lower housing expenses if you pay off your mortgage before retirement. But your housing costs may creep back up if an injury or declining mobility forces you to renovate your home or move someplace that's already built with accessibility in mind. ### What will my retirement income be? Map out all your potential sources of retirement income, including Social Security benefits, pensions, and withdrawals from 401(k) or individual retirement account (IRA). How much income you'll need depends on your unique circumstances and what your ideal retirement looks like. An [online retirement calculator](https://www.newyorklife.com/resources/financial-calculators/retirement-savings-calculator) can help you estimate whether you're on track or need to catch up. "Plans should be personal, but a good start is to ensure you have between 70% and 90% of your pre-retirement income when combined with Social Security," says Lawrence Sprung, a certified financial planner (CFP) and wealth advisor with Mitlin Financial. Hypothetically speaking, this means that you should aim for an annual retirement income of $70,000 to $90,000 if your income before retirement is $100,000. Another guideline is to have one to eight times your annual income saved up, depending on your age. For Americans between the ages of 34 and 44, the recommended savings balance is three times their annual income. That said, these benchmarks are guidelines that may not apply to everyone. The right amount depends on your unique financial situation, what you want your retirement to look like and how much you expect to spend. ### How long will I live? No one wants to think about their own mortality, but life expectancy is key to estimating the size of your nest egg. The longer you live in retirement, the more money you'll need to maintain your desired standard of living. The average life expectancy in the U.S. is 79, according to the Centers for Disease Control and Prevention (CDC), but some people live much longer. Another resource is the Social Security Administration's (SSA) [life expectancy calculator](https://www.ssa.gov/oact/population/longevity.html), which uses your age and sex to estimate how many more years you might live. Depending on those three factors, your estimated life expectancy may be higher or lower than average. These calculators don't tell the full story or account for individual factors like family history, health and lifestyle, but they can help you estimate a retirement income target you're less likely to outlive. ## Commonly overlooked costs in retirement Even those who are well-prepared for retirement can be caught off guard by these expenses. ### Taxes Your tax obligations may be relatively straightforward when you're working and earning income from a single job. But once you retire, your income will likely come from a mix of sources that are taxed differently. The amount of tax you owe in retirement can also vary from year to year depending on which accounts you withdraw money from. For example, withdrawals from 401(k) plans and traditional IRAs are taxed as ordinary income. Depending on how much you withdraw, you could end up in a different income tax bracket and pay a higher tax rate than you anticipated. Similar tax considerations apply to income from pensions and certain types of annuities. ### Long-term care There's a good chance you'll need skilled care during your lifetime. Approximately 48% of those who live to age 65 or older receive some form of paid care during their lives, according to a [2019 study](https://aspe.hhs.gov/reports/what-lifetime-risk-needing-receiving-long-term-services-supports-0) by the U.S. Department of Health and Human Services (HHS) and the Urban Institute. Long-term care is any care designed to help you complete your day-to-day activities, such as eating, showering, getting dressed and moving around your home. This includes relatively affordable services like meal delivery and more comprehensive options like round-the-clock care at home or in an assisted living community. Contrary to what you might expect, Medicare only covers short-term nursing care and physical rehab when it's medically necessary, such as after a hospitalization. It typically doesn't pay for any day-to-day support you may need as you age. To bridge this gap, you may need to plan ahead and set aside dedicated savings. ### Healthcare costs Medical expenses are a significant consideration for retirees. "Healthcare is by far the biggest unknown when it comes to retirement, especially those retiring before age 65 when Medicare will kick in," says Sprung. If you retire before 65, you may need to purchase private health insurance, which can be expensive. Even after Medicare kicks in, you'll need to plan for premiums, deductibles and other out-of-pocket costs. ### Inflation Prices for everyday essentials like groceries, household items and gas tend to rise over time, and coping with inflation on a fixed income can be challenging if you don't plan for it before retirement. "The biggest thing I see happen to early retirees is not sufficiently accounting for inflation in their expenses," says Ronnie Colvin, a CFP and founder of Fractional Planning. Inflation is expected to average [2.5% over the next 10 years](https://www.clevelandfed.org/indicators-and-data/inflation-expectations), according to the Federal Reserve. Retirement planners often factor a 2% to 4% cost-of-living increase into their clients' future income calculations to account for any years where inflation spikes. Social Security benefits and some government pensions also adjust for inflation through cost-of-living adjustments (COLAs). In 2026, the Social Security Administration increased monthly payments to its beneficiaries by 2.8%. ## How can a financial professional help with retirement? A financial professional or wealth advisor can take a look at your current finances and help you develop a personalized retirement plan. They can advise you on the best way to invest, save and manage your money so that your nest egg is solid when you exit the workforce. Many Americans feel more secure after working with a financial planner, according to [Wealth Watch](https://www.newyorklife.com/newsroom/wealth-watch-inflation-and-uncertainty), a survey of 2,262 people conducted by New York Life. About a third (31%) of respondents who worked with a financial professional say they feel more prepared for retirement, compared to just 8% of those who didn't work with one. Financial advisors differ in how they're licensed, what they can offer, how they're paid and what professional standards they adhere to. Before working with anyone, ask about their credentials, how they're compensated and whether they're acting in a fiduciary capacity, meaning that they are required to work in your best financial interest. ## FAQs ### At what age can I collect 100% of my Social Security benefits? For anyone born in 1960 or later, full Social Security benefits are available at age 67. You can claim the benefits earlier, but doing so permanently reduces your monthly stipend. The Social Security Administration (SSA) takes a small percentage off for each month you claim before your full retirement age. ### What is the average retiree savings balance? On average, those between the ages of 55 and 64 have $185,000 saved for retirement. However, the general retirement savings guidelines recommend having at least eight times your salary by that age range. ### What is the $1,000-a-month rule for retirement? The $1,000-a-month rule is a simple way to estimate how much you need to save for retirement. It suggests having $240,000 invested in a diversified portfolio for every $1,000 you want to generate in monthly retirement income. While this rule offers a helpful starting point, it doesn't account for factors such as taxes, inflation or market downturns and shouldn't replace a comprehensive retirement plan. *New York Life paid for the creation of this article. 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