When most people think about retirement, they only think about not working, they don’t plan what they will do every day
Maybe you want to play golf, go fishing, cruise around the local lakes in your boat, or travel to some beautiful and exotic places in the world. But your financial situation may limit your ability to fulfill your retirement dreams. Some people may have enough money to do what they’d like, while many others are going to struggle to make ends meet.
If you don’t have a budget and know exactly what you are spending now, you are only guessing at the amount of money you’ll need to live on in retirement, and what your retirement budget will allow you to do.
Once you know your current spending, match your spending against the income stream available to you in retirement. When will you be eligible to take Social Security? Do you have a 401K or 403B and how much income will it provide? Is there a pension plan or an IRA or other long term savings available to fund your retirement? How much of your income will come from personal savings?
To put yourself in the best financial position for retirement, pay off all credit card and consumer debt so you are not dragging your debt into retirement. In addition to consumer debt, work hard to get your mortgage retired before you retire.
Everyone understands the stock market rises and falls in cycles over the years. Yet when it comes time to plan for retirement, this basic fact can be very hard to deal with if it impacts your personal savings. If the market drops right after you retire, you could find yourself with a far smaller retirement nest egg than you anticipated. To mitigate the impact of a down market, reallocate your retirement savings to more conservative investments as you get closer to retirement.
When you think about retirement, how do your plans tie into the plans your spouse has? Couples don’t always have the same ideas about anything, let alone retirement, so it’s important to have open-ended discussions about what each of you expects. Take time to discuss various aspects of retirement and develop a plan that works for both of you.
Talk about everything, including your expectations for retirement, what your new schedule will look like, how you’re going to divvy up household tasks and how your identity is going to change. You can develop compromise by when each of you makes a list of expectations such as:
- Downsizing, or moving to a new location to be near family
- Places you would like to visit
- Cultural or sporting events you want to attend
- Exercise or sports activities you’d like to do
- Volunteer work you will enjoy
Once you each develop a long list of possibilities for retirement, go through it together noting what is the same on both lists and where the differences occur. Have a give-and-take discussion where each of you compromises to some extent. You both need to have your own activities and you also need to spend time doing things together.
Retiring from a job often leaves a void in a person’s life. If you’re like many would-be retirees, you’ll likely be retiring from a job, and not necessarily to something better.
Even if you are in a job you’ve come to dislike, work is a reason to get out of bed every day to feel useful and productive. Most people feel needed at work as they contribute to the purpose of the business. When you stop working, what will compel you to get out of bed each morning?
Using your retirement time wisely means figuring out your purpose during this season of life. Humans continue to thrive when they have a purpose and are contributing to something.
Retirement is a time when you can serve other people by making a worthwhile contribution to a mission close to your heart. Giving your time and talents to a worthy cause is one of the most fulfilling things you can do in life. There are an unlimited number of causes that need volunteers to help achieve their goals. Explore something you never had time to get involved in when you were working and find ways to use your time, talent and treasure supporting a greater good.
Retirement can be one-third of your adult life. Having a purpose and being engaged in an activity you enjoy is a sign of wellbeing. As you wind down your paid employment, begin thinking about a cause that can become your passion. What talents and strengths do you have that will enable you to contribute in a meaningful way to a purpose that is close to your heart?
Retirement offers you the chance to do what you always wanted to do, and no longer focus on simply earning a living. Plan your retirement so you love having a purpose and passion for each and every day.
“Do nothing without deliberation; then once you have acted, have no regrets.” Sirach 32:19