With a baby boy on the way at the end of February with girlfriend Lauren Silverman, the X Factor mentor, 54, is also preparing to pop the question.
"Simon has an engagement ring, but is being secretive about the proposal," a source tells PEOPLE. "Simon is flying to the Caribbean for the Christmas holiday. Lauren will join him for parts of the holiday trip. Simon could be planning a special holiday proposal. It seems he will definitely propose."
Cowell, who seems "very happy" with Silverman, is also "beyond excited about his son," the insider says. "He loves feeling the baby kicking and acts very proud that he will be a father."
Adds the source: "Simon is being supportive of Lauren's divorce settlement with Andrew [Silverman]. Simon just wanted Lauren to get a quick divorce so they could start their new life together. Simon has mentioned that Andrew had a couple of divorce conditions that are not ideal, but he has not talked about the details."
As for reports that the settlement prohibits Cowell from meeting Lauren's son [with Andrew] until 2015, the source confirms that Cowell "does not have any contact with her son."
Silverman is planning to give birth in New York City, according to the source, who also says, "Her friends are planning an N.Y.C. baby shower that Simon will attend."
A rep for the music mogul tells PEOPLE the matters are "private and there will be no comment on it."
Reporting by PATRICK GOMEZ