If you are considering retirement, there are many aspects you may be contemplating, including, financial, living arrangements, daily activities, work, business plans, and more. Not only will retirees face some noteworthy financial changes after retirement, there are some significant lifestyle changes that will transpire as well.
Here is a self-evaluation checklist to determine if you are ready for retirement:
- Are you financially ready for retirement?
Evaluate your financial situation to ensure the ability to live the lifestyle you want to live—long-term. According to a recent study at Boston College Center, over 40 percent of the working people in the U.S. found that they had misconceptions about being on track financially, to maintain the standard of living they were accustomed to on a long-term basis. - Will you need to generate extra income after retirement?
To estimate whether you will need income (in addition to Social Security income, pensions, retirement funds and investments), use an online retirement budgeting tool. Be sure to update your estimated expenses and income as needed—for example, when downsize your home. The tool will help you evaluate how long your retirement funds will last given specific expenses. - If you need additional funds after retirement, how will you make more money?
If you find that you will come up short financially, or plan to put off receiving Social Security checks, to boost the amount of Social Security income you will receive down the road, how much will you need to live in the meantime? Calculate how much of your nest egg you can withdraw each year, without running out of money in the long run. Consider setting aside part of your savings for an immediate or long-term annuity, so you can rely on a second source of guaranteed income (in addition to Social Security). - Are your health insurance needs taken care of?
According to the Bureau of Labor Statistics, the average expense for healthcare for retirees is approximately 15% of overall spending (depending on age). Be sure to explore options for supplemental medical insurance, as well as including health care expenses in the long-term budget. - Is your investment portfolio prepared for retirement?
Although there is no one size fits all scenario, when it comes to investing for retirement, in general, many people retain 30 to 60 percent of their assets in stocks. To be certain, retirees may want to consult with a professional financial planner (be sure he/she is certified and has a proven track record). - Do you have a plan in place for what you will do with your extra time each day?
For most Americans, the retirement years comprise approximately 30 percent of their life. Creating a plan for satisfying daily activities is important for retirees to maintain meaning and purpose in life. This is referred to as “lifetime planning.” Decide whether you will continue to work or run a business part time, how much time you will devote to traveling, hobbies, physical fitness, volunteer work, classes, book clubs, and socializing with friends and family.
Being happy and successful after retirement looks different for each person. But, lifestyle and financial planning are vital to undertake, BEFORE retirement, for those who plan to make the retirement years some of the best years of their lives. Once you take the checklist and determine your life’s plan, you will know that a happy and fulfilling retirement can be yours!
Resource:
Updegrave, W. (2017, August) Are you really ready for retirement? CNN Money. http://money.cnn.com/2017/08/16/retirement/retirement-checklist/index.html
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