Here are some of the most common signs that you might need a new water heater to avoid surprises:
You notice dirty water or water with sediment in it. Draining a tank water heater can help fix this problem, but in some cases, you'll have a rusty or partially-disintegrated tank.
Your water heater makes a lot of noise. Knocking, grumbling, and rumbling sounds could mean your water heater is failing.
You're not getting hot water. If you've checked your pilot light with a gas water heater and the igniter has been examined to see that it still works, there's a good chance that a replacement is your only option. Calling a repair company to confirm is always a great idea.