After spending many years planning for retirement, you want to make sure your golden years get off to a good start. But how do you know if you are on the right path?
Luckily, a few key financial indicators can reveal whether your first year of retirement is a financial success or not. Here are 10 signs of success that you should look for.
Earn cash back on everyday purchases with this rare account
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You are not falling into debt
Thanks to high interest rates, it’s easy for consumer debt to spiral out of hand. And many seniors are at risk, with more than half of all households headed by someone 75 or older carrying at least some debt, according to the Federal Reserve.
If you have stayed out of the red during this first year of retirement, you’re saving money. Avoiding interest payments will serve you well throughout your golden years.
You are not taking too much from your nest egg
Building a nest egg gives you a pool of money to tap when you are no longer working. But that money needs to last as long as possible, which means only withdrawing what you need.
If you haven’t spent more of your savings than you planned on spending this year, you’re setting yourself up for a comfortable future.
You are taking advantage of Medicare
Medicare — the federal government’s health insurance program for retirees and some other individuals — helps seniors access affordable health care even after they leave the workforce.
If you’re already enrolled in Medicare and taking advantage of benefits such as yearly wellness checks, you’re taking care of both your health and your budget.
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There's a credit card that's making waves with its amazing bonus and benefits. The Wells Fargo Active Cash® Card(Rates and fees) has no annual fee and you can earn $200 after spending $500 in purchases in the first 3 months.
The Active Cash Card puts cash back into your wallet. Cardholders can earn unlimited 2% cash rewards on purchases — easy! That's one of the best cash rewards options available.
This card also offers an intro APR of 0% for 12 months from account opening on purchases and qualifying balance transfers (then 19.49%, 24.49%, or 29.49% Variable). Which is great for someone who wants a break from high interest rates, while still earning rewards.
The best part? There's no annual fee.
You have planned for long-term health needs
While Medicare can help you pay for short-term hospital stays, it doesn’t cover the long-term care that many seniors end up requiring at the end of their lives.
If you’ve already set aside money to cover long-term care in the future, that’s a key indicator you’re in a good place financially — not just now but for the rest of your life.
You have life insurance if you need it
Not everyone needs or wants life insurance. Some people have no desire to secure this type of coverage in retirement.
But if you’re using life insurance to leave behind an inheritance, it’s a sign that you’ve gotten your finances in order so you can leave a lasting legacy after you’re gone.
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You don't feel compelled to file early for Social Security
While you can start taking Social Security benefits as young as age 62, getting benefits before you reach your full retirement age — which is now 67 for anyone born in 1960 or later — means your monthly benefit will be lower.
If you haven’t felt pressured into taking reduced Social Security benefits just to make ends meet, it’s a sign that your retirement is off to a good start.
Your mortgage is small or entirely paid off
Paying off a mortgage eliminates one of your biggest monthly expenses. In fact, many retirees find this to be the costliest item in their budget.
If you’ve already paid off the mortgage — or plan to do so within the next few years — you’re starting retirement on the right financial foot.
You have a big balance in your HSA or another source of funds for health care costs
While you can’t contribute to a health savings account (HSA) once you’ve signed up for Medicare, you can generally use the funds you’ve saved previously in an HSA to pay insurance premiums or cover out-of-pocket medical expenses.
Entering retirement with money in an HSA — or simply accumulating a lot of cash to pay for medical expenses and keeping it in a savings account — ensures you can continue to pay for health care in the future. That is a great indicator that you’re doing well financially.
You’re enjoying your free time instead of stressing about finances
Even if you’re in a great spot financially, it’s normal to worry about finances at least a little bit.
But if your bills are paid and you have plenty in savings, you shouldn’t have to spend hours each week fretting about finances. That is a pretty good sign you’re in a comfortable spot.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
You’ll also get insider info on social security, job listings, caregiving, and retirement planning. And you’ll get access to AARP’s Fraud Watch Network to help you protect your money, as well as tools to help you plan for retirement.
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
You are working a little so you can avoid spending savings
Plenty of retirees pick up a side gig to earn extra money. It’s especially nice if you can make some cash from one of your favorite hobbies. For example, maybe you sell crafts online.
Others take up part-time work so they can earn a little spending money rather than taking money from their retirement savings accounts.
If you’ve landed a side gig so you can avoid dipping into your savings, that’s a sure sign you’re taking steps to secure a successful retirement.
Bottom line
As long as you keep up the healthy financial habits that led you to a successful first year of post-work living, you can likely look forward to enjoying a stress-free retirement.
Hopefully, you’ll continue to spend your golden years focusing on living life to the fullest instead of wasting time worrying about money.
Lucrative, Flat-Rate Cash Rewards
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Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 19.49%, 24.49%, or 29.49% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
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