In general, brake fluid should be changed every 1 to 2 years. Over time, brake fluid will start to absorb moisture, which will reduce its effectiveness and ability to withstand heat. Water contamination increases the danger of brake failure because vapor pockets can form if the fluid gets too hot. Vapor displaces fluid and is compressible, so when the brakes are applied the pedal may go all the way to the floor without applying the brakes. Water in the brake fluid can also cause corrosion in the calipers, master cylinder, brake lines, and ABS components. Even a very small amount of moisture can significantly reduce the boiling point of brake fluid.

You can test brake fluid with a chemical strip. Its like a coated strip of paper that when dipped into your brake fluid, will change color depending on the condition of the fluid. Brake fluid can also be tested electronically with a brake fluid diagnostic tester. I think there is also a way to test with a voltmeter.

I had a similar problem on my '05 Saleen. Turns out, I had aftermarket pads on the front brakes that were making this noise. Something was wrong with the adhesive behind the pad. I swapped out the pads with Ford pads from the dealer and the problem was solved.

Most likely not an issue. It's more than likely just the fluid you are hearing as it enters and exits the caliper. However, BigBlock is correct. The brake system should be bled about once a year. More if the car is used for Open Track (Road Racing type of event) or any extended hard braking situations. In those scenarios, the fluid should be bled imediately afterwards. A real simple way to tell if the fluid needs to be bled/changed is to note the color of the fluid. If it's the least bit discolored, it needs to be flushed out. There is a simple guide on how to properly bleed brake fluid on our website. I have provided a link for your convenience.

Wouldn't be suprised if you have very little pad left. Squishing sound sugests air in the system.Pull the front wheels first and inspect pads.