4 Questions to Ask Before Setting Your Retirement Date
April 22, 2015 | Enjoying Retirement
At some point, you’ll say “goodbye” to your coworkers, get into your car and drive toward the next phase of your life—retirement. But when will that be? Will you retire early to give yourself extra time to build a different life? Keep working to save more for retirement? Or do you love what you do and plan to keep doing it for as long as possible?
The move to retirement is one of the most important decisions you’ll make, so it’s not surprising that determining the date is harder than you may expect. I have a colleague at work who says with certainty that he’s going to retire in five years. I laugh each time I hear this because he’s been saying the same thing every year for the last five years.
So how do you know when it’s the right time to retire? Here are four questions that can help you determine if you’re ready for life’s “second act.”
1. Are you prepared financially? The first and most important question to consider is whether your retirement nest egg is sufficient to support the lifestyle you envision for 30 or more years. So how do you know how much is enough? This is where a financial professional can help. He or she can help show you how to create a lifelong stream of income. By taking a careful look at your overall retirement picture, you may find you’re in better financial shape than you thought.
I love telling a story about a woman who was terribly unhappy at work and desperately wanted to retire, but she was worried she didn’t have enough of a financial cushion to take the plunge. Her financial professional showed her how her savings could help her create the retirement income she needed. The woman went back to her work and promptly gave notice. She’s now happily retired.
2. Are you emotionally ready to walk away? Although life without a schedule can sound exciting, many people find they miss the social interactions and gratification of a demanding career. If you still feel excited to get up each morning for work, if your closest friends are colleagues at the office, or if your personal identity is wrapped up in your job title, you may not be ready yet for retirement. If that’s the case, you may want to continue working for a few more years until you feel more ready to leave your career behind. In the meantime, get involved with people and activities outside work. That way you’ll have meaningful connections beyond the office once you finally step away from your job.
3. Is your partner on board? Retirement can be an adjustment for the person who is either continuing to work or already staying home. Be sure to talk candidly with your partner to discuss your respective goals and wishes for retirement. Together, establish a game plan that works for both of you. Some couples even enter retirement slowly so both have a chance to adapt to spending more time together.
4. Do you have a clear vision for retirement? Could you enjoy your life if there was nothing on the schedule each day, just relaxing in the moment? Most people find they need more in retirement than playing golf or walking the beach. Setting some specific lifestyle goals can help give your retirement focus and meaning. Look for activities and projects that you’ll enjoy and that will enable you to channel your energies so that you’ll be as active and engaged as you want.
The notion of the perfect time to retire is evolving. Where once turning 65 was the trigger to stop work, today there are complex issues to consider, including your financial, emotional and physical readiness to stay or step away from work. The more you can weigh these factors in advance, the easier it will be to decide when you want to retire and the smoother your transition into this exciting stage of life will be.