5 crystal-clear signs you’re (very) well prepared for retirement. Can you finally stop stressing?

Vishesh Raisinghani

Sun, July 26, 2026 at 3:55 PM GMT+3 6 min read

If you're looking ahead to your retirement years with a sense of dread, you're not alone.

Retirement confidence in the U.S. has fallen to its lowest point since 2017, according to an April survey by the Employee Benefit Research Institute. The cost of living is rising, budgets are stretched and there are doubts about the future of Social Security and Medicare.

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If you're feeling uneasy about healthcare costs, inflation, not enough savings or interest rates, you're in good company. Still, hitting certain milestones on your way to retirement can be a good sign that your finances are in better shape than your anxiety suggests.

Here are five crystal-clear signs you've prepared well for retirement.

1. You've paid off your home

It's becoming increasingly common to carry debt into retirement — especially mortgage debt. In 1989, only 24% of homeowners between the ages of 65 and 79 had an outstanding mortgage, according to a 2023 report by the Harvard Joint Center for Housing Studies. At that time, only 3% of households over the age of 80 held a mortgage. By 2022, those ratios have jumped to 41% and 31% respectively.

Dealing with monthly interest payments is stressful even for many younger Americans at the height of their career. But if you're retired and living on a tight budget and fixed income, the stress is probably amplified.

So, if you're part of the lucky majority of seniors who have managed to pay off their primary residence before retiring, you're in a better position than most of your peers.

2. You're relatively healthy

Not only is healthcare expensive in America, the costs are also escalating. Obama-era Affordable Care Act (ACA) subsidies expired at the end of 2025 and KFF estimates the typical enrollee's premium payments will more than double.

Meanwhile, 25 of the drugs that Medicare's Part D spends most money on have seen their prices double in 11 years, according to the AARP.

Unsurprisingly, most Americans are worried about paying more for medical care. According to a West Health and Gallup annual survey, 47% of respondents said they were concerned about healthcare costs in 2026 — the highest ratio since 2021.

Simply put, being healthy and free of any chronic conditions is a game changer for your wallet. If you're retired and over the age of 60 or 70 and still in relatively good health, you're in a better financial position than many seniors.

3. You're living below your means

Reality rarely lives up to the expectations set by your financial advisor or any spreadsheet you made during the retirement planning process. Many retirees find that their monthly and annual expenses exceed the budget they created. In 2024, roughly 31% of retirees said their annual spending is much higher or at least a little higher than they can afford, according to a survey by the Employee Benefit Research Institute (EBRI). Another 2026 EBRI survey found that 2 in 5 retirees say overall spending has run higher than expected.

With that in mind, if you are spending less than you anticipated, that's a good sign that your retirement is on a better track than most others. The ability to consistently live below your means over several years reduces the chances that you'll outlive your retirement savings and probably gives you some room to indulge in luxuries occasionally.

4. Your kids are independent

The cost-of-living crisis is particularly brutal for young Americans who are just starting their careers. To plug the gap, many young adults are turning to the Bank of Mom and Dad. As of 2024, 50% of parents with children above the age of 18 provided at least some financial support to them, according to Savings.com. On average, this financial support was estimated at $1,474 a month.

That's likely to be a substantial drag on your personal finances, especially if you're retired and living on a fixed income. But if your adult children have left the nest and are financially independent, you're in a more comfortable position to focus exclusively on yourself.

5. You have a margin of safety in your portfolio

Every retiree has a so-called "magic number" that unlocks a comfortable retirement. On average, retirees are aiming for $1.2 million in savings and investments to meet their budget, according to Schroders. That's not far from the $1.46 million "magic number" Northwestern Mutual landed on.

These targets are often based on several variables that are difficult to predict with high precision over the long-term. After all, there's no magic crystal ball that allows you to see what inflation, stock market returns and interest rates will look like 30 or 40 years from now. But having a plan, even if imperfect, is better than winging it.

For this reason, you can prepare for it with a thicker safety net. If your retirement portfolio is 10% or 15% larger than your 'magic number,' you're probably in a better position to tackle any unexpected hurdles and volatility.

Of course, exceeding your retirement target is rare. In 2024, only 17% of retirees said they saved more than what they needed, according to the EBRI. So if you find yourself part of the exclusive group, you can rest assured you're better-prepared than the majority of your peers.

— with files from Dawn Cuthbertson