7 Signs You Should Put Off Retirement

You’ve had a rough day at work.  The boss called you in to his office for a dressing down.  Your co-worker didn’t complete the work you need for your project.  On your commute home – traffic jam again! – all you can think about is packing it in for good.

A lot of people underestimate what they need to do financially, mentally and emotionally to prepare for retirement.

So, before you get too excited about the prospect of snoozing through your alarm every morning, take some time to think about whether you are in good shape to retire and make sure you’re prepared.

1.  You don’t have a clear financial plan

Don’t think you’re just going to fall into a comfortable retirement.  Things don’t automatically come together at the last moment.  You can’t expect to retire comfortably until you have at least a rough estimate of your expenses and created a monthly budget.

How can you make proper decisions if you don’t know what you have, what you want to do, and how much it will cost?

Determine your income target and how you will reach it.

Make an appointment with a financial planner to figure out what you need. Or plug some numbers into a retirement calculator  on a regular basis to see how you stack up.  You may not like the answers, but it’s better to know you have a potential shortfall while you still have time to make adjustments.

2.  You’re still carrying a lot of debt

You may think that your bill payments are at a comfortable level now and assume you can continue to pay them once you stop working.  But these expenses are definitely going to put a strain on your funds.

When you’re retired, you’ll likely be living on a fixed income with every dollar accounted for.  If you are still paying off a mortgage, car loan or credit cards, you’ll be using money that could have been put toward other living expenses.  If your monthly payments are chipping away at your savings, you won’t have much to live on. Plus, debt reduces your ability to handle financial shocks and deal with inflation.

It may be wise to work a few more years to pay off as much debt as possible, making it one less thing you need to worry about when you do retire.

3.  You’re struggling now

If you’re currently struggling to cover your living expenses, this is not the time to retire and try to live on less income.  You need to be able to comfortably make ends meet on your working income before you can even contemplate living on less.  Re-examine your budget and identify areas to cut down to save more.

You may have experienced a major financial setback – divorce, job loss, illness.  Curve balls come when you least expect them. You’ll need to rethink your target date.

4.  Work is still important to you

Some people dread their job and live for the weekend.  However, if work is still important to you, you shouldn’t rush into retirement.  Stay in your field as long as you feel motivated to reach your professional goals.

There are mental, physical and emotional benefits to working if you enjoy what you do and that’s all the more reason to stick with it.

5.  You’re caring for children or elderly parents

A lot of people who want to retire are either responsible for their elderly parents or they’re still caring for children.  According to the Pew Research Center, 15 percent of people age 40 to 59 are “sandwiched” and providing care to both children and parents.

You can’t realistically ignore these demands.  Caring for children and aging parents can deplete your nest egg faster than you think and can make it difficult to replace the money when you need it the most.

6.  You’re not on the same page as your spouse

Retirement is a major life change, and it’s a household decision. Too many people think solely about themselves and their retirement plans. But when you plan to retire, you need to be on the same page with your spouse. Your spouse might not plan to retire for many years and being retired alone might not be as fulfilling as you expect.

Also, the reduction in income could also cause financial problems and place more strain on your partner than you realize.  Without it, your household debt might rise, or your spouse might have to work longer than intended.

Related:  Should Couples Retire at the Same Time?

7.  You haven’t decided what you’ll do with your time

If you’re the type of person who doesn’t enjoy downtime, then retirement might not be the blissful experience you expect it to be.

You’ll have a lot of hours to fill so you have to give some thought to what your future will look like day-to-day.  If you don’t have any interests and hobbies, and nothing appeals to you you’ll find yourself bored and unhappy.   This can lead to increased spending as shopping and dining out are sometimes used to fill the time. 

The bottom line

Retirement should be a joyous accomplishment in your life — not a source of stress. Bemoaning past poor decisions and bad luck won’t change reality. The best way to avoid stress is to get your financial house in order and resist the urge to retire early if you’re not truly ready for it.

Staying on the job an extra year or few increases the number of years you can save for retirement and reduces the number of years you will have to withdraw from your savings.

Retiring when you’re not ready could mean setting yourself up for years of financial struggle and disappointment.  Make sure it’s the right move for you – both financially and emotionally.

Related:  Retirement Planning Options to Reach Your Goals

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