But make no mistake, it’s also certainly a time of change. And because these changes will certainly impact your life in myriad ways, it’s best to make sure that you are definitely ready to take the plunge into the golden years. Afterall, there is no ‘perfect’ time to retire, because this will change from person to person based on their specific circumstances, as well as where they are at emotionally, mentally and financially. So how to gauge where you stand in relation to the golden years? As a starting point, here are some important points to consider:
Try to determine if you are really ready:
One of the very first things any good retirement guide will have you do is ask yourself some very poignant questions. And remember to be honest with yourself too. Only you can really ascertain if you are ready to take the plunge or not. These are some of the questions that need answering:
Are you able to afford it?
Retirement will mean giving up your monthly consistent salary (generally, there are some people that want to work into retirement and those that even start their own businesses). But this potentially uncertain financial landscape in retirement means that you will absolutely need to determine if it’s financially viable. Are your children financially independent and out the house? Are your debts paids? Do you have a substantial nest egg? Perhaps do a test run on a retirement budget (you can find more information on this in the retirement guide), and see how you fare.
Have you talked it through with your significant other?
If you are in a marriage or a relationship, you need to consider that going into retirement will not only affect you but them. Be transparent about where you are at and hear them out. This could help avoid any challenges later down the line.
Do you have different streams of income?
Do you own a rental property? Do you have a small business on the side? Are you earning passive income for any reason? Different sources of income will help you to retire early, as you are not totally dependant on your work salary alone.
Can you afford to keep working?
Some people actually feel the need to leave the workforce based on the fact that they feel that work-related stress and long hours impact negatively on their health. For people that feel like this, the key question to answer is, is it more detrimental to keep working – can you afford not to retire?
Take a look at your savings:
The next step that will be outlined in the retirement guide (and one that links with setting a trial retirement budget) is to take a look at everything you have saved (including retirement accounts and pension funds). Based on a rough calculation of what you will need a year based on the lifestyle you would like, see if you think you have enough put away. If you are not quite there, you may need to hold it off for a few years.
Consider diversifying your investment portfolio:
If you haven’t yet, perhaps while you are still toying with the idea of retirement it might be a good idea to diversify your investment portfolio. This can range from the riskier investments (such as stocks) to those that are deemed ‘safer’ (such as property – some consider this ‘safer’ largely because it is a physical thing that you own as opposed to a piece of paper). Keep in mind that something such as an investment property that you rent out can bring in a constant stream of income while in retirement. For more in-depth exploration of investment ideas please refer to our retirement guide.
Consider how you spend money:
Regardless of how well you have prepared for retirement, the chances are you are going to have to be very careful with your money and how you spend it. Take a look at where you can downgrade slightly? Perhaps your house is too big for just you and your partner? Perhaps you don’t need that full time gym membership any longer? While you can’t let yourself get sucked into scarcity thinking, just understand that you will need to be wise with your money in retirement.
Feeling a little more comfortable about retirement but would still like more information? Contact us for information on expanding your investment portfolio with property in Spain. Our magnificent Calpe apartments will serve as the ideal source of income during retirement, or even a retirement residence in the sun down the line!