Making the Leap into Retirement
You’ve been spending more and more work time thinking about the things you would do if you were retired. Financially, are you ready to walk away from a well-paying job and give up that salary? Not to mention the benefits.
You’re now in your peak earning years and in the next five or ten years you could sock away substantially more into your investment account.
Are you financially ready to retire?
Roger has reviewed his company defined benefit pension plan. He can retire with full benefits next year. He has run the numbers on several different on-line calculators to see where he stands. His conservative projections show that he’ll have more than enough money to live very comfortably in retirement – easily including some travel and other luxuries. He’ll likely even leave behind a fairly substantial estate.
But, the thought of no salary coming in terrifies him.
Related: Determining Your Retirement Income
If you’re asking yourself, “How much money is enough?” let me ask you this:
- Were you financially ready to buy your first house?
- Were you financially ready to get married?
- Were you financially ready to start your family?
Retirement is another life milestone. Many people will never have “enough” money to retire, regardless of how much wealth they have. They will always feel that they need more.
Savers take joy in the art of saving- watching the numbers add up and compound.
However, a lot of people feel that having less money in their retirement fund is an acceptable trade-off for more years of leisure.
At what point does your time become worth more than the money you’ll earn at work?
Why work those extra years for money you don’t really need?
Assuming you’re in good health, you likely can happily do all the things on your bucket list while you’re still relatively young. That may no longer be the case when you reach 70 and beyond.
Make sure your spouse is on the same page about your retirement. If not, find an ideal compromise. You don’t want him or her to be freaking out about running out of money. You have to incorporate their wishes and work together to come to an agreement.
The bottom line
For decades you’ve been building your financial security by earning, saving and investing. It might be hard to stop.
Increasing your wealth by 20-30% probably won’t substantially change your life. Is it worth exchanging those extra years at work for a more lavish retirement?
If you know you’ll have enough money for the future, learn to loosen the purse strings and break your old habits so you can enjoy what you’ve worked so hard for – with no regrets.
Related: Assessing Your Retirement Cash Flow