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Your money, not your age, signals when it's time to retire

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Bar chart shows how Social Security benefit payments differ based on the age you start receiving them.
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Sunday, July 18, 2010

My husband and I are hoping to retire -- or at least reduce our work schedules -- when our youngest child, who is now 9, graduates from college.

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We decided to wait until that benchmark is met to make sure we're still in our peak earning years to pay for all the children's education without incurring debt. Before we retire, we also want to have enough saved to replace a certain percentage of our pre-retirement salaries.

Most importantly, we decided not to take a mortgage into retirement the way some people take overstuffed luggage on a long vacation. We want to be rid of that financial baggage as we coast into our sunset years.

That's our plan.

So, let me ask you, what benchmarks are you using to determine whether you can live comfortably in retirement?

I ask because I've run into far too many folks whose only benchmark is their age. They have no plan, no checklists.

"I'm out of here at 55," one woman told me.

"Can you afford to retire at 55?" I asked.

She didn't know.

"When you are in retirement and you're on a fixed income and that fixed income is all you have forever, you better have a plan," says Darsi Ringer, vice president and financial consultant for Charles Schwab.

Ringer advocates considering the following to determine whether you are ready to retire:

-- Will your mortgage be paid off?

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