Retiring by the End of 2026? 4 Key Questions to Ask Yourself First

If you're aiming to retire by the end of 2026, congratulations. You're almost there!

You may be planning to spend the next couple of months training a replacement at work and making plans for the new year. But it's important to make sure you're truly ready for retirement. And to do that, it's best to run through these essential questions.

Image source: Getty Images.

1. How much income will my savings provide each year?

Even if you're still contributing to an IRA or 401(k), at this point, you should have a good sense of the savings balance you'll be retiring with. Using that, you'll need to figure out how much income your savings can realistically provide each year.

Of course, that starts with establishing a withdrawal rate. With a fairly equal mix of stocks and bonds in your portfolio, the popular 4% rule might work for you. If you're invested more conservatively, your withdrawal rate will need to be more conservative, too.

As an example, let's say you're retiring with $2 million and decide to use the 4% rule. That means you can expect about $80,000 a year in income from your savings. You'll need to see if that, combined with your planned spending and other income sources, will suffice.

2. When will I claim Social Security?

Social Security might play a big role in your retirement income even if you have a nice amount of savings. If you were born in 1960 or later, your Social Security full retirement age is 67, which is when your benefits become available without a reduction.

You can file for Social Security as early as age 62. But for each month you file for benefits before full retirement age, they get reduced. The flipside is that delaying Social Security past full retirement age boosts your benefits by 8% a year until you turn 70.

It's important to know when you'll claim Social Security because that will directly impact how much money you get each month. You can then use that information, along with your estimated withdrawals from savings, to ensure you'll have enough money to cover your anticipated expenses.

3. What will I do about healthcare?

Many people lose access to health insurance once they retire. If you'll be 65 or older by the time that happens, you should be eligible to enroll in Medicare. If not, you'll need to think about where your health coverage will come from.

COBRA may be an option if you're close to age 65 and you can afford the cost. With COBRA, you keep your employer coverage but without subsidized premiums, which can make it prohibitively expensive. If you have a multi-year gap until Medicare kicks in, you may want to explore an ACA plan, especially if your income is modest enough that you might qualify for a subsidy.

4. What will I actually do with my time?

You may be looking forward to not having to get up early every morning, drag yourself into the office, and contend with a traffic-filled commute on the way home. But just because you're excited about a more laid-back routine doesn't mean you shouldn't actively come up with ways to fill your time before you retire.

Some people find that retirement comes with too much free time. That could be a frustrating experience, so it's important to know what you'll do once you're no longer committed to a 40-hour workweek. You may decide to take up a new sport, volunteer, or even work part-time to avoid boredom.

You may be excited to begin your final countdown to retirement. And if you expect to end your career by Dec. 31, the holidays might serve as a double celebration. Just don't forget to address these key questions first to ensure that there are no major gaps in your plan.

The Motley Fool has a disclosure policy.