When it comes to retirement, you have to be dead honest about your lifestyle needs and financial situation. The truth is that the best time to retire is when you feel confident emotionally and financially to enjoy your new phase of life. While you might be mentally ready to stop the daily grind, your bank account could reflect otherwise. Before you take a retirement package or hand in your resignation, consider the following retirement guide questions and benchmarks to determine your level of readiness:
Can you afford it?
If you’ve paid off your house, your children are financially independent, and you have a retirement fund with enough savings to cover your daily living costs and get you through a rainy day, then chances are that retirement is on the cards.
The best way to check this is to test run a retirement budget. Break down every expense and see if you have enough money to live on without sacrificing your accustomed quality of life. As part of their retirement guide, MoneySense <insert link to guide> suggests embarking on a six-month trial to see how you fare on your budget. If you find it manageable and have funds leftover, then you’re financially ready to quit the 9-5.
Have you discussed it with your partner?
Naturally, retirement doesn’t just affect you. Have you and your partner decided how you want to go about retirement? You need to determine whether or not you’ll retire at the same time (if they work), what your priorities will be, how your lifestyle might change, and how expenses will be handled. You both want to enjoy retirement as much as possible, so you need to draw up a plan that is viable for both of your individual and joint needs.
Do you have multiple sources of income?
How diverse is your financial portfolio? One way to ensure that money won’t run out is to create multiple sources of income. These provide extra layers of financial security during retirement that will continue to grow your nest egg and can cover emergency expenses.
A good retirement guide will encourage you to find all the possible ways to maximise your income during your golden years. You could freelance, open up a consulting service, invest in stocks, downgrade from your current home or buy foreign property to let. The options are manifold, so there’s no need to panic if you haven’t secured additional income.
Can You Afford Not To?
Your job environment should never be detrimental to your health. If the place where you work isn’t conducive to good health and happiness, then you might feel it’s best to leave. Negative and stressful environments can impact your health for the worse and have dangerous long-term effects that outweigh your reasons to stay.
If you feel that you’re ready to start relaxing and you’re satisfied that your health care is covered, your debts are paid, you’ve run a test budget, and you and your partner have a clear understanding of retirement expectations, then you’re most likely ready to embrace this exciting stage of life. Asking these sorts of questions is a good indication that you’re already well on your way to healthy retirement planning.
Retirement is time to embrace forgotten pastimes, try our new hobbies, explore new places, and do all those things you couldn’t get round to during your working life. Still feeling overwhelmed and looking for a retirement guide? You can see our apartments in Calpe. They’re situated on the beautiful coast of Spain and make popular buy-to-let rentals.