One common concern among folks in their 60s is determining a prudent time to retire. After decades in the workforce, many people are understandably uncomfortable with the idea of no longer receiving a paycheck. While the top concerns are usually related to finances, there are also lifestyle adjustments that must be considered to ensure a fulfilling and secure retirement.

Before handing in your resignation letter, it’s important to consider the core aspects of a successful retirement. Below is a “retirement readiness checklist” to assess whether you are ready to retire:

1. Wipe out all your debt.

Debt can be a useful tool in many aspects of life, like buying a home, affording a car or growing your business. As long as a person acts responsibly and has a long runway to pay back that loan, it can enhance their life and take their career to the next level.

However, as folks enter their retirement years, many shift to living on a fixed income. Being saddled with debt, and its associated extra expenses, can be burdensome and make retirement life much more stressful. That is why I advise all retirees to eliminate all debt before retirement.

2. Consider your Social Security claiming strategy.

Social Security is a crucial income source for many retired Americans. Getting it right is critical for a financially successful retirement.

If you are in good health and don’t currently need the cash flow, holding off on claiming Social Security is a smart strategy to mitigate the impact of inflation. Today, full retirement age (FRA) for a retiree to get their full benefit ranges from 66 to 67, depending on the year you were born. One can claim Social Security as early as age 62, but anything before FRA comes with a reduction in benefits up to 30%.

Conversely, Social Security will add an additional 8% delayed retirement credit to your monthly payout for each year, up until age 70, that you hold off on claiming the benefits. That’s a guaranteed annual return of 8% for deferral after your FRA.

3. Assess your income sources and expenses.

Creating a budget for a multidecade retirement is not practical. Prices change, unforeseen expenses arise, and life takes unpredictable turns. However, there needs to be a general calculation to determine if you can afford a particular lifestyle.

This computation doesn’t need to involve anything fancy. Start by listing all your income sources such as Social Security, pension and portfolio or rental income. Next, tally your living expenses, like food, rent, taxes and transportation costs.

Make sure to also factor in any other costs associated with living the retirement you envision, including travel or hobbies. Finally, ask yourself two questions:

• Does my income exceed my expenses?
• Can I afford to live this lifestyle for the rest of my life?

If the answer to either of these questions is “no,” then changes must be made. You can consider working longer, even part time, moving to a cheaper locale or adjusting your retirement lifestyle.

4. Determine a safe withdrawal rate from your portfolio.

A safe withdrawal rate is the percentage that retirees can withdraw from their accounts each year without running out of money before reaching the end of their lives. This is a key aspect in determining how long you can maintain your lifestyle. A popular guideline is the 4% rule, which suggests that an individual can withdraw 4% of their total portfolio value annually to sustain their lifestyle without running out of money.

One important factor when determining your safe withdrawal rate is your legacy goal and how it impacts your retirement goals. Your legacy goal involves estate planning and how much money you’d like to leave to your children or charity. This objective will directly impact how much money you can withdraw each year from your nest egg.

5. Consider Medicare and Medigap deadlines.

Medicare is a federal health insurance program that can provide coverage beginning as early as the first day of the month in which you turn 65. At age 64 and 9 months, you have a seven-month initial Medicare sign-up window. If you miss this window, you may have to pay higher premiums for the rest of your life. An exception is if you still have medical insurance through your or your spouse’s employer. In that case, you can postpone enrolling in Medicare until that coverage ends without having to pay higher premiums later.

Medigap is Medicare supplemental insurance, which is a private insurance that covers some of the out-of-pocket costs not covered by Medicare. There is a six-month enrollment window for Medigap that begins on the first day of the month in which you turn 65. During this enrollment period, you can’t be denied Medigap coverage or charged extra because of poor health. However, if you miss the enrollment deadline, you may pay higher premiums for life or even be denied coverage.

6. Plan for long-term care needs.

Long-term care involves needing assistance with the “activities of daily living,” which include bathing, dressing, grooming, using the toilet, eating and moving around. These services are not covered by Medicare and can be prohibitively expensive. It is difficult to predict how much or what type of long-term care a person might need, but the best time to think about long-term care is well before you need it so you can consider all your options.

The main strategies for paying for long-term care are self-funding, insurance or Medicaid planning. Each one of these approaches has myriad considerations and should be discussed with a professional who can help assess which option is the most suitable for your needs.

7. Simplify your financial life.

Keeping your finances consolidated and organized is always sensible. This is even more important as people age. As a youngster, you may be able to more easily track your multitude of accounts at various brokerage firms. This will become increasingly more cumbersome and stressful as you get older.

I suggest to all my clients approaching retirement to consolidate their accounts wherever possible. This includes rolling over old 401(k)s, consolidating various IRAs and taxable accounts where appropriate and managing all banking (i.e., checking) at one institution.

Furthermore, having a seamless process for a child or trusted family member to make decisions on your accounts in case you no longer have capacity will save a lot of heartache and frustration later.

8. Plan to retire TO something, not FROM something.

Being frustrated at work or trying to get away from a difficult boss are not good reasons to retire. Situations at work change daily, and bosses come and go. Making an emotionally charged decision to stop working can be devastating if not thought through fully.

The reason to retire is because one has the burning desire to pursue other interests, goals, and lifestyle choices. These new pursuits should be clearly defined and laid out. Not knowing what activities and challenges you’d like to engage in when you retire may lead to boredom and more rapid mental deterioration.

9. Develop a daily routine for retirement.

Working provides many benefits, including daily structure, intellectual stimulation, social interaction, and a sense of purpose. Sadly, many retirees discover what they lost from being out of the workforce only after they’ve retired.

It’s essential for retirees to re-create all the aforementioned benefits gained from working while in retirement. This may include consulting part time, volunteering, philanthropic work or various other projects that can be pursued every day for several hours a day throughout your retirement years.

Many people envision their retirement as a life of leisure, sipping cocktails by the beach, playing golf or visiting their grandchildren. Unfortunately, none of these activities is a full-time pursuit. Most hobbies can’t be done full time. It’s imperative for folks to develop and even test out their daily retirement routine while they are still working. This aspect of retirement readiness is just as important as the financial considerations.

10. Spend your money!

While working, people are told repeatedly to save and invest. However, few people are encouraged to spend their nest egg. This shift in psyche from saving to spending is a difficult transition for many. Retirees often have feelings of guilt about spending down their nest egg, thinking perhaps the money could be better used by the kids or a charity. This is the wrong approach!

As I remind my clients, money is not a scorecard to compare to others. Rather, it’s a tool to enhance one’s life. After decades of making money, saving and investing it, you have earned the right to spend it. As long as you are spending within your means, it should be done guilt-free.

Many of these concepts require years of planning, which is why I urge clients who are entering the final phase of their careers to start contemplating these points sooner rather than later. Taking the time to methodically plan for this new stage of life will allow you to make thoughtful decisions and adequately prepare for retirement. It will ensure your golden years are how you envisioned they would be.