Think you are ready to retire? Before quitting your job, be sure you are prepared financially and otherwise. Here are nine ways to know the right time for retirement.
At what age did you plan to retire? 30? 50? Maybe 60? There is no fixed age for retirement. Anyone can retire at any time. But how do you tell if you are ready to retire?
Many people fail to recognise the monetary, psychological, and emotional preparations needed to retire comfortably. To retire well means you must be all-round prepared for retirement. Otherwise, you will be back in the workforce in no time. Or worse, buried knee-deep in debt.
Here are nine ways to know whether you are ready or not.
You Have No Plans For Post-Retirement Activities
As employees, we all yearn for retirement until we retire and have a lot of free time on our hands. Each day becomes a new opportunity to do new things and pursue new hobbies.
When your only buddies are those you work with and are still employed, you must decide how you will spend your time. It is critical to build strong social networks and take up new hobbies before you make the switch.
You Have Not Factored In Inflation
You are not ready to retire if you do not factor in inflation. One common retirement oversight is failing to make provisions for the impact of inflation. A product that costs 2 pounds today might go for double that price in a few years. How do you mitigate this increase if you only budgeted for 2 pounds? This will affect your spending, making you run out of money sooner than planned. Be sure to factor in inflation.
You Have No Retirement Budget
Have you done the math yet? What are your basic needs? What would you spend more on? What are your sources of income? Any passive income? These are some of the things you need to figure out before retiring. Without a clear picture of your expense and income, you will find yourself deep in debt in a few months. Retiring doesn’t take away your expenses. Take the time to draw up a budget.
Working Is Still A Priority For You
You have no business with retirement if working is still your priority, as a result of low income or simply because you love your job. Don’t allow anyone to compel you into retirement if you still feel deeply attached to your job or are pursuing promotional offers. Letting go of this part of you may affect you more than you think. Make sure you are ready psychologically.
You Have Parents Or Children Who Are Financially Dependent On You
Not everyone does enjoy the luxury of quitting their jobs. Some people are responsible for their parents, spouse, and children. Therefore, it’s best to save enough money to meet these costs or continue to work until you are ready to retire. It is okay to flirt with the idea of retiring, but you should consider hanging on until you are ready if you have a family, depending on your paycheck.
You’re In A Lot Of Debt Right Now
Most people have no idea how much debt they have accumulated. They keep working and living without a clear picture of their total expenses and accumulated debt. How much is left on your mortgage? What about your car loan? Have you cleared your credit card debt and done with student loans? You should rethink retiring if you belong to this category. The last thing you want is to retire into debt.
You’ve Never Considered Healthcare Expenses
Healthcare costs are skyrocketing. This is even worse for senior citizens facing more health concerns than the young population. So, if you are considering retirement, you want to factor the cost of health care into your retirement savings before quitting your job. Consider unanticipated healthcare costs if you require long-term or round-the-clock nursing care.
You Haven’t Looked Over Your Investment Portfolio In A While
As you approach retirement, it is important, now more than ever, to keep an eye on your investment portfolio. You want to make sure your portfolio is well-diversified so that it can resist risks and provide you with a steady paycheck for the foreseeable future. A crucial part of your retirement strategy should include risk management and wealth protection. Be open to discussing your approach with your financial advisor and reviewing your portfolio regularly. Remember, finance is a vital sign to predict when you are ready to retire.
You Haven’t Budgeted For Miscellaneous
As you create your retirement budget, you must consider leaving some space for miscellaneous expenses. It is great to plan and budget, but the truth is, you cannot possibly budget for everything. You will encounter plenty of unforeseen expenses over the years. Your best bet is to plan for such expenses right now. Please don’t wait till they come around.
With so much time on your hands, you will likely want to travel more and do more fun stuff that you didn’t do before. Additionally, you want to leave room for some lifestyle changes too. Have you budgeted for this?
Given that retirement is a significant life adjustment and can be challenging, we encourage you to wait till you are fully ready to retire before joining the bandwagon. Yes, retirement is beautiful, but that is if you only plan for it. Without financial solid and psychological preparation, you may find yourself back in the workforce or struggling with debt for the rest of your life. This is no way to retire. We are here to help! For professional assistance, don’t hesitate to contact us.
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Recommended books for further reading:
- Smarter Investing: Simpler Decisions for Better Results
- Investing QuickStart Guide: The Simplified Beginner’s Guide to Successfully Navigating the Stock Market, Growing Your Wealth & Creating a Secure Financial Future
- Unshakable by Tony Robbins
- Influence; the psychology of persuasion by Robert B. Cialdini
- My philosophy for successful living by Jim Rohn
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