With the end of the year approaching quickly, you may be in the final stretch of your career if 2026 is when you're slated to retire. But if you're going to stick to that plan, it's important to be confident that you're ready to end your time in the labor force. Here are four questions to ask if you're set on retiring in 2026.
1. Do I know what my monthly spending will look like?
Your monthly spending as a retiree may be similar to what you're spending now. Or it may be lower or higher.
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Before you retire, sit down and create an actual budget based on your anticipated expenses. Make sure to account for costs that might rise due to you not being in an office every day, like higher heating and electricity bills. On the flipside, you can deduct the cost of things like your daily parking fee if you won't be working any longer.
2. Do I know how much monthly income to expect?
Ideally, you'll have a number of income streams to enjoy in retirement. Those might include Social Security benefits, withdrawals from a retirement account, and, if you're super lucky, a workplace pension (though that's less likely if you're a private-sector employee).
If you're aiming to retire in 2026, now's the time to add up all of those income sources and make sure they align with your projected spending. If you're counting on Social Security, it's pretty easy to figure out what benefit you'll get. Just create an account on SSA.gov and look at your most recent earnings statement for an estimate of your monthly payments.
If you're entitled to a pension, someone from your place of work should be able to give you details on what to expect -- or least tell you where to look.
Figuring out how much income your retirement savings will give you may be a bit trickier. That's because you'll need to decide what withdrawal rate you're going to use to make sure your money lasts as long as it needs to.
If you land on the 4% rule, which is a common strategy for retirees, and you have a $1 million IRA or 401(k), that gives you $40,000 your first year of retirement. You'll then adjust future withdrawals for inflation. You can divide that $40,000 by 12 to see what monthly income you'll get, and then add it to your Social Security and pension payments for a complete number.
3. Do I know what I'll do for health insurance?
If you'll be at least 65 years old when you retire, you'll generally be able to get health coverage through Medicare. If not, you need a plan, since going without insurance for any amount of time could be a very dangerous thing for your finances.
If you're close to 65 at the time of your retirement, retaining your workplace coverage through COBRA may be an option to look at, albeit an expensive one. If not, start researching health insurance plans now so you know what costs to anticipate.
4. Do I know what I'm going to do with my time?
As important as it is to be financially ready for retirement, it's just as important to be emotionally ready. As you gear up for that change, ask yourself what you plan to actually do with your time once you stop working.
You don't want to end up feeling bored and lost once you no longer have a job to go to. So make sure to have some activities lined up. That could be a combination of volunteer work, social plans, hobbies, and travel.
Retirement may be closer than ever at this point of the year, so it's crucial to ask these key questions sooner rather than later. Doing so could help you enter retirement feeling more confident and prepared.
