How to determine if you're retirement-ready

The end of the year is a popular time to retire. And if you're seeing some of your colleagues preparing to sail off into their golden years, that may have raised the question: When will I be ready to retire?

Getting the timing right on retirement is important. Retire too early, and you risk running out of funds. Wait too long, and you won't have as much time to enjoy the freedom of no longer working. To make sure you exit the workplace at the right moment, here are some questions to ask yourself to assess your readiness.

Have you saved enough to enjoy the retirement you envision?

It's not necessarily easy to determine how much you'll need to comfortably retire, but it's an important calculation to make. "One of the first questions would be 'What does retirement look like for you?'" Jackie Cummings Koski, a CFP and financial consultant, told CNBC Select. For instance, if you plan to do a lot of travel, you'll need to save more than if you're content sticking closer to home.

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There are also several rules of thumb you can use to get a number. For instance, per CNBC Select, "the 4% rule, which states that you should be able to comfortably live off of about 4% of your investments in each year of retirement," could be "a good rule of thumb if you plan on spending the same amount of money in retirement as you do now." Your total savings should be about 25 times your annual retirement budget.

As Kiplinger noted, getting the timing right on when your Social Security benefits "is critical for a financially successful retirement." While you can technically claim Social Security as soon as you're 62, there are benefits to waiting, if you're able. Per SmartAsset, "waiting until 70 to claim your Social Security benefits allows you to receive the full amount of your benefits in addition to delayed retirement credits, equal to 132% of your planned Social Security benefits in total."

At the end of the day, "the choice ultimately depends on whether or not you need that cash more immediately as you cut back on your working life or whether you can afford to put off receiving those benefits for a few years," SmartAsset explained.

Have you paid off any debt?

Debt is a big burden to carry into retirement, especially since you'll no longer be regularly bringing home a paycheck and will instead be living on a fixed income. To avoid the stress of "being saddled with debt, and its associated extra expenses," as Kiplinger put it, aim to pay down all of your debt before you retire.

If that sounds like a tall order, at least try to pay down "bad debt," which is high-interest consumer debt like unpaid credit card balances," explained CNBC Select. Solutions for debt paydown can range from a debt payoff strategy like the debt snowball or avalanche method to a debt consolidation loan. Also start adjusting your spending habits to better align with your income, as that will be especially important when living on a fixed income when you retire.

Do you have a vision for how you'll spend your retirement?

Don't let logistics cloud your vision for retirement. Before you clock out for the final time, it's also important to have an idea of what's ahead — after all, you'll soon have 40 or more hours a week freed up. According to Kiplinger, frustrations at work or a bad boss aren't good reasons to retire — rather, "the reason to retire is because one has the burning desire to pursue other interests, goals, and lifestyle choices."

"These new pursuits should be clearly defined and laid out," advised Kiplinger. Keep in mind that many leisure activities don't constitute "a full-time pursuit," as Kiplinger underscored, and see if you can realistically envision what your day-to-day routine may look like once you're a retiree.

Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads.