Can You Really Retire? 4 Warning Signs You’re Not Ready

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In this episode of Your Retirement Guide, George Jameson, CFP® and founder of Capital Wealth Group,  flips the script and shares four key warning signs that you may not be ready to retire. If you're wondering “Can I really retire?”—this episode is a must-listen. Don’t miss these critical red flags that could signal it’s time to reassess your retirement readiness. 

 Welcome to "The Retirement Guide" Podcast! I'm your host George Jameson, owner of Capital Wealth Group, a Fee Only Advisory firm. Whether you’re nearing retirement or already retired, Join me each week as we explore the world of retirement planning and equip you with the knowledge and tools you need for a successful retirement.

Thank you for tuning in to this episode of The Retirement Guide. If you enjoyed this episode, please subscribe & leave a review. If you'd like a free 30-minute retirement review, visit our website at www.capitalwealthplan.com to schedule.

This is for education only.It is not tax, legal, or investment advice. Before  acting on any information consult your tax, legal, or investment advisor.

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Episode Transcript

George Jameson (00:00):
Welcome back to Your Retirement Guide podcast.

(00:02):
I'm George Jameson, certifiedfinancial planner and founder of
Capital Wealth Group.
Many of us in our fifties andsixties want to know when we can
retire.
Today's episode sort of flipsthe script instead of asking,
can I retire?
Let's ask what habits andbehaviors trip up those who

(00:23):
shouldn't retire, at least notyet.
Here's the truth.
You can have a hefty nest eggand still struggle if certain
financial behaviors aren't incheck.
In this episode, we'll explorefour common red flags I see in
clients who aren't quite readyto retire, number one, credit

(00:45):
card balances.
You might be thinking, I pay myminimum payment each month.
How bad can it be?
But constantly carrying a creditcard balance signals a behavior
that clashes with the retireesmindset.
In retirement, every dollarcounts.
You are living off a fixedincome and high interest debt

(01:09):
can erode your purchasing powerfaster than inflation.
If you walk into retirementcarrying large credit card
debts, that behavior needs to bein the rear view mirror.
Now don't get me wrong, Irecommend using credit cards,
especially over debit cards dueto security and fraud

(01:30):
protection, but you definitelydon't want to carry a balance
and you wanna pay them off infull each month.
So if this is you, one actionstep can be, make sure you pay
off all credit card balancesbefore setting your retirement
date.
If you're not there yet,consider a debt snowball.
And absolutely pay off thosecredit card debts before

(01:52):
retirement.
And number two, having a car ortruck loan in retirement.
Now, I'm not totally againstfinancing a car after all.
I prefer credit card forpurchases too, for the fraud
protection.
But rolling a car loan intoretirement, to me, that's a red
flag.

(02:12):
I've seen clients in their latefifties still making.
500 to over a thousand dollarsmonthly auto payments, and it
raises questions.
Are you buying too expensivecars?
Are you not keeping vehicleslong enough or are you just
comfortable carrying debtbecause your portfolio covers

(02:33):
it?
Even a 0% auto loan canbackfire.
Sure, your money might beearning seven or 8% in the
market, but that comes withmarket risk.
A car depreciates the moment youdrive it off the lot so in
retirement, your goal should beno debt, so pay off that loan

(02:53):
before retirement and then goingforward.
There's nothing wrong withbuying a reliable, used three to
5-year-old vehicle outright.
So what's the action item?
Plan to own your vehiclesdebt-free by your retirement
date.
Extend the life of your cars bytaking care of them.
Try to reduce turnover andreallocate that monthly payment

(03:17):
toward living expenses or travelor whatever hobbies you enjoy
doing.
And now number three, mortgages.
Ah, this is a big one.
Your home I'd estimate about 30%of the people I talk to still
have a mortgage at retirementnow first having a low rate

(03:39):
mortgage.
Can make sense if you currentlyhave a two and a half percent
mortgage rate and you can getfour or 5% in some type of
guaranteed investment thatarbitrage can work.
But here's the catch.
When you stop earning apaycheck, you're relying on

(04:01):
distributions from yourportfolio to make the mortgage
payment, and that mortgagepayment becomes a non-negotiable
expense.
When I review cash flows, I ask,can you write a check today to
pay off the mortgage?
If the answer is yes, but Idon't want to because my payment

(04:22):
is low and have a very lowinterest rate.
In this case, it may be okay tocarry a mortgage in retirement.
However, I prefer clients gointo retirement mortgage free.
It's often more of a mindset andgives you peace of mind.
It's mentally freeing andsimplifies your budget.

(04:46):
No lender to contact, no escrowto track just you and your
retirement income.
So what's the action item here?
If your mortgage rate is above3.5%, consider paying it off
before retirement.
If it's below 3.5%, it's okay tocarry a mortgage.
And then number four, not havinga budget.

(05:09):
Perhaps the most surprising is alack of a budget going into
retirement.
You would think someone with aseven figure portfolio would
have every dollar tracked, butso many people tell me, I'm not
sure what I spend.
I guess it could be around6,000, 7,000, 8,000 a month.

(05:29):
Not really sure that vague,somewhere between attitude may
be okay for some, but inretirement, strongly suggest
getting a more precise figure.
In retirement, your cashflowflips.
There's no more saving forretirement.
Now you're spending, and moreimportantly, you have more time

(05:53):
to spend it between hobbies,travel, kids, grandkids, and so
on.
So if you don't plan, you couldovershoot.
I challenge clients to build abudget spreadsheet.
Categorizing current expensesthen adjust for retirement
changes before they retire.

(06:14):
Here's what typically drops401k.
Contributions obviously go away.
Payroll taxes, drop kids'tuition, but what often rises is
healthcare cost, homemaintenance, cost, and then all
those leisure and travelactivities.
So what's the action step oraction item here?

(06:35):
Draft a detailed annual budgetbefore we retire.
You can also practice living offthat budget to make sure it's
realistic and then revisit itquarterly or twice a year, at
least during the first two yearsof retirement to capture your
real spending patterns and thenadjust accordingly.

(06:57):
So there you have it.
Four behaviors that signal youmay not be ready for retirement,
which include large credit cardbalances, auto loans, possibly
mortgage debt, depending on yoursituation, and then not having a
budget.
If any of these resonate, don'tpanic.

(07:20):
Recognizing the issue is thefirst step toward fixing it.
And before we close, I want tohear from you.
Are there any other red flagsyou've encountered?
Drop a comment on [e-mail] or
send me an [e-mail].
And if you found this episodehelpful, share it with someone

(07:41):
who's asking, can I retire?
I'm George Jameson with CapitalWealth Group.
Hope you have a great day andsee you next time.