Ever since you started life on your own, you have focused on keeping food on the table and a roof over your head and the heads of those who depend on you.
If you’re lucky enough to have a traditional 40-hour work week, you will spend about 2,087 hours a year at work, minus what you take for vacation, sick leave or holidays, according to The Nest. When you add up the decades you’ve spent earning your keep, it’s easy to find yourself wanting to retire as soon as possible.
Regardless of whether or not you’re of retirement age or are thinking of stepping away early, there are some key things you should consider before confirming the start of your next chapter.
Tips for making sure it’s the right time to ride off into the sunset
Analyze Your Finances
The clearest way to tell if you’re ready to retire is by analyzing your financial situation. You might feel ready to stop reporting to work, but if you don’t have enough saved up you could find yourself looking for employment again. Maurie Backman, a personal finance writer with The Motley Fool, cautions that you may want to think again if you plan to rely on Social Security to make up for your lack of savings. In its present state, the average American cannot support their lifestyle with Social Security, which should only be expected to cover about 40 percent of your pre-retirement income or less. That means your savings (both traditional and in your retirement accounts) should be robust enough to make up the difference.
Think About Health Costs
One of the biggest costs you incur as you age is health care. If you or your spouse are less than the U.S. Medicare age, which is 65 years old if you were born before 1955 and 66 years and two months if you were born after, then you must be ready to pay for insurance in retirement. You might not realize how expensive out-of-pocket medical insurance is if you have always been covered by an employer plan, so you should investigate the options available to you before you make any big decisions about retirement.
Thinking about retirement? Create a retirement plan using Minster Bank’s handy calculator.
Factor in Debt
When considering retirement, debt should be a major factor in making your final decision. If you still owe money on a mortgage or any other large credit line, there needs to be enough money in your monthly budget to fulfill those obligations. Sarita Harbour, a former financial advisor and current writer for Investopedia, suggests waiting until larger loans or cards are paid off before you retire.
Create a Retirement Plan
Work is a huge part of your life, so much so that it could even be a major part of your sense of identity. When you retire, you no longer have to deal with rationing out your time between your work obligations and your personal life, which can be both a positive and a negative.
Tom Sightings, a contributor to U.S. News & World Report, says that you have to realize that retirement is a whole new phase of life, meaning you will need to decide what you will do to occupy your time. Volunteering, part-time work or commitments to other lifelong passions are all options in retirement. Whatever works best for you and your interests, it’s encouraged that you find something to help fill your days meaningfully so as to maintain your sense of self and sense of purpose.
Before you decide to alert others of your retirement, you should speak to a financial advisor or other professional about your specific circumstances to make sure you’re truly ready to make that leap. Also be sure to speak with your family, as they will play a key part in helping you adjust from the working world to a life of rest and relaxation.
Published by Minster Bank
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