Retirement Retirement Planning

9 Signs You’re in Worse Shape to Retire Than You Think

Ready to retire? If you're doing these things, you might need to rethink that plan.

By Holly Humbert

Edited by Eric McWhinnie

Updated Jan. 22, 2025

Less than half of Gen X and baby boomers feel ready to retire. Maybe it's the increased cost of living in recent years, but that isn't the only reason you might be wary of retiring.

Here are nine things that could be stunting your retirement plans and making your situation worse.

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You have a lot of credit card debt

Credit card debt is on the rise across the country. The average American carries almost $6,000 in credit card debt, with average monthly interest rates hovering just above 20%.

Credit card payments reduce your monthly cash flow. It's best to pay them off as soon as possible to alleviate your monthly debt burden and use that money for other purposes. A top 0% intro APR card could help you get out of debt sooner.

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You live in a high-cost area

If you live in a high-cost-of-living location, you're paying more for your everyday items — most notably, housing, food, and transportation.

Places like Hawaii, California, and New York top the charts for a high cost of living. If you're looking to position yourself better for retirement, consider moving somewhere with a lower cost of living.

You still have an expensive mortgage

Everyone needs a place to live, but a mortgage is one of the biggest monthly expenses. While building equity can be a positive step toward retirement, the monthly financial commitment can prevent you from building more accessible wealth.

If you can eliminate that expense, you could improve your cash flow. With housing costs still on the rise, eliminating your mortgage will help keep your housing costs lower.

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You still have a car payment

Car payments seem to be getting bigger and bigger each year. The average monthly new car payment in 2023 was $738. That doesn't include registration, maintenance, repairs, or gas costs.

That monthly financial obligation can limit your ability to plan for retirement. If you have one (or more) car payments, you might want to reconsider your transportation situation.

You're all-in on one investment

Choosing one stock, or even one asset to put all your retirement hope in, is risky. If you go all-in, hoping to score big — you could lose it all. Diversifying your investments can help protect you against market downturns and extreme losses.

Spread your retirement investments across a variety of stocks, bonds, and other assets for more protection.

You're counting down the clock to 59 1/2

Age 59 1/2 is when you can start withdrawing from your retirement accounts without a penalty. If you're counting down the days until you can grab that money, you might be worse off than most.

More people than ever are planning on working until 65-70 to help offset the need to rely on Social Security and retirement funds to live.

Retirement News: Almost 80% of Americans fear a retirement age increase — here’s the real reason why

You haven't started saving for retirement

If you haven't started saving for retirement yet, you could not only be missing out on compound interest but potentially a 401(k) match from your employer and tax savings. But how much do you actually need?

Fidelity recommends this simple formula to see how you measure up, "Aim to save at least 1x your income by age 30, 3x by 40, 6x by 50, and 8x by 60." If you haven't started saving for retirement, the best time to start is today.

You're in poor health

Health care is a huge cost during retirement. Some estimates put average health care costs after age 65 in the six-figure range. If you aren't looking after yourself now, you could be stuck with higher health care expenses as you age.

Annual physicals and screenings allow your doctor to monitor any changes you're experiencing as you age and address any concerns you have.

Following proper nutrition and wellness advice like drinking enough water, eating a variety of foods, and moving your body will not only make you feel better but will also likely help save you money in the long run.

You don't have a budget or financial plan

Freewheeling your spending and savings efforts isn't a financial plan or strategy. If you don't take charge of your finances, you may find yourself at retirement with little to show for it.

Budgeting can help make your spending purposeful, offer stability, and allow you to grow your savings and plan for the future.

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