How To Tell Whether It’s Time To Retire

Considering whether to retire is one of the most difficult career decisions a worker can make. Employees are often earning their maximum income at the point of retirement, so the financial implications can be profound. Careful planning about the transition from full-time employment to retirement can enhance your chances of making a smooth adjustment. There are many elements to consider before making a final decision:

Be Sure You Really Want To Retire

Don’t confuse an unsatisfying job situation with an imperative to retire. Ask yourself if you would still retire if you were carrying out your job duties in a better work environment.

Check Out Alternative Careers

Employees who are working in a job that is not a good match for their skills, values, and interests are more likely to rush into retirement. Make sure that you wouldn’t be happier with a career change than with retirement. If you have any doubts, consult a career counsellor and see if you come up with any inspiring alternatives.

Make Sure You Can Afford It

Track your expenses so that you have a realistic handle on how much income you will need to sustain your preferred lifestyle. One commonly cited goal is to have saved enough money so that for each year of your retirement, you’ll have at your disposal 70-80% of the income you earn annually prior to retirement. Remember, when you are working you have a two day weekend – this becomes a seven day weekend when you retire, and when do you spend most of your money……………..?

Factor in changes that you could reasonably anticipate after retirement. For example, you would no longer be paying out money for work clothes or commuting costs but you might spend more on vacations, entertainment, and dining out.

Meet With A Qualified Independent Financial Adviser (IFA)

Consult an IFA for additional insights into whether you have the money you’ll need to retire. Visit your country’s the Social Security website to obtain an estimate of your benefits. Find out from your Pension provider(s) what your income potential will be from those sources.

Phase In Retirement

If you need to generate some income or would prefer to continue with some employment to keep busy, explore the possibility of reducing your hours at your current employer to phase in retirement. Your employer might also consider retaining you in some other, lesser role or as a consultant?

Investigate Medical Insurance

If you are not yet of the age when you’re eligible for free government medicare, consider your options for health insurance coverage and know the costs. Meet with a member of human resources (HR) at your current employer so that you are fully aware of any post-retirement benefits offered and the implications for your transition.

And don’t count on medicare to cover all your medical expenses after you retire. Fidelity Investments estimates that about 15% of the average retiree’s annual expenses will be related to health care. Fidelity also estimates the average couple who are now 65 will need $285,000 to cover medical costs in retirement—and that doesn’t include long-term care!

Talk To Your Spouse (If You Have One)

You may have decided you’re ready to retire and know what you’d like to do once you have had enough of working, but is your spouse on the same page? Make sure your retirement goals and expectations are the same. If you are older than they are, will you retire and leave them working still? Will they be happy with that? Or do you intend to retire together? If there is a significant age difference between you, maybe your spouse is too young to retire with you?

Do A Test Run If Possible

Perhaps the best way to prepare for retirement is to do a trial run. Test out some of your planned retirement pursuits while taking some time off. Or you might start to volunteer or do some consulting on the side to explore the viability of those options.

A happy retirement is one that is planned for. Please let me know if you need specialist advice in this area from a Retirement Expert.


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