Retirement is almost a distant dream in the 21st century. We're almost always too busy to chase this fantasy-like concept. We keep lying to ourselves that we'll begin next year, upon reaching the next benchmark, or maybe when the time is right.
But you know what? The time will never be right. And you will never find yourself ready to retire unless you give it enough thought. You will never be ready unless you plan it out thoroughly and assess yourself.
To give you the push you need, we have researched the behavior and experiences of retired individuals and gathered thought-provoking questions that could help you prepare.
Answering these questions will grant you custom and specific retirement planning advice. You won't have to stress and second-guess yourself, relying on generic solutions proposed by others. Instead, you will have sorted and effective solutions of your own.
1. What will I do after retirement?
Let's talk about the time before we jump to money. That's our primary currency.
When you think of the word retirement, what pops up in your mind? Do you see yourself relaxing on a luxurious island? Or do you see yourself volunteering at the local school? Do you see yourself pursuing dreams that your job never permitted you to think about? Or do you see yourself exploring, now that you have conquered everything?
The scenario is unique to each individual. We all have a very different idea of retirement. But that's the key! That's the core aspect of any retirement plan.
Before you proceed any further, sit down and sketch out what an ideal day would look like in your retired life. List the ways you wish to spend your time. Assess the needs of that routine. And that will give you the answer to the next question.
2. Do I have enough savings?
When it comes to savings, nothing's ever enough. And that's particularly true if you are looking after the whole of your family. Or if you have a young and striving business.
Even if you have an amount in hand, it feels insufficient. And that's because you are not sure about the needs ahead.
The same applies to saving for retirement. If you do not know what you'll be doing, you won't know the expected expenses, and so you will never be able to answer if the savings are enough.
So, first, get through the first question. Calculate, and you'll find an answer to the second.
With that said, there's another thing you ought to take great care of - inflation rates. According to predictions, the inflation rate has increased from 1.8 percent to 2.6 percent over 2021. In 2022, it will increase another two percent. By 2024, we expect inflation rates to bring a rise of 2.3 percent in the existing prices.
Hence, along with savings for probable expenditure, you ought to save for inflation rates too. If you currently save to spend $10,000 per month when you retire, you should save at least $13,000 to $15,000 for each month.
3. Can I work some more?
The concerning question is: do you want to work more?
Some people find themselves passionate about work and productivity, and some don't. So, it depends on you.
One common misconception that we'd like to clear here is the fact that there's no fixed age for retirement. Sure, most people retire by 65. And it's a general estimate that 65 is a good age to retire.
But that's just an estimate based on estimated work-life conditions! If you find your job or business rewarding, then you might want to work until your late eighties (given your health permits). If you think you should retire at the age of 65 only because your current position or job drains the life out of you, then you might want to change your workplace.
Remember, retirement is not an escape. It is a choice. If you run to it because of other reasons, you might find yourself regretting your retirement. Explore your potential and put it to the best use!
Also, if you feel you can conveniently juggle between work and life, then continuing with work might be a wiser option. It will bring in a steady flow of income while keeping you fulfilled with life.
4. What happens to my lifelong hard work?
Well, that's a big question mark for those who failed to plan earlier, and retirement seems to be just around the corner. Improper or insufficient planning could put all your life's hard work down the drain, particularly if it's a business.
For those who worked for companies all their lives, taking their leave might be easy. They will file an application, receive a farewell party and gratuity amount, and voila, they're free!
However, those who began with their very own ventures might come at the crossroads of living life or working until they die if they do not have an exit plan. That's because if you abruptly sell your business to just anyone in the year you wish to retire, you might have to make a bad deal. Plus, you will not have enough time to assess whether the next group of individuals is capable of handling your business or not.
For that very reason, business owners, particularly small business owners, are advised to begin planning their exit strategy right when they begin with the venture. It will keep them mentally ready, moderately invested, and on the lookout for like minds. Say you build a team with like minds. You will have the advantage of selling this business to someone within your team only who will understand the mechanism and worth.
5. What will be my responsibilities after retirement?
Again - this question reiterates us back to the major answer to question one and two. However, it has a fine line and an important difference, which is why we mentioned it separately.
You ought to know your liabilities and responsibilities before you retire so you can calculate the finances you need for these duties. The same applies to time. When you know what you require, you will be able to work your way towards it.
Note that liabilities and responsibilities do not only refer to your family duties and citizen duties. It also applies to yourself. You have to have a budget for your possible or potential medical expenditures.
6. Could you shift to business or part-time work?
Why not! If you have been running a business all your life, you might want to try a hand at other roles and do a part-time job. Never hesitate in exploring your dreams and fantasies. If the accountant's job in your office used to fascinate you, now is the time to give it a try. It will bring you some extra cash too.
As for starting a business, well that's more like reversing the whole concept of retirement. Business comes with a lot of stress. But if you wish to do it for fun and experiments on a light note, then go ahead!
7. Am I emotionally ready?
Last but very importantly, do you find yourself emotionally ready? If work has been a large part of your life, chances are you might get a bit depressed. That's because we spend most of our lives being useful for the community and keeping ourselves occupied 24/7.
The buzz of every day becomes a part of who we are. And before we even know, we are not even working to pursue our dreams. But we are working because we have become accustomed to the daily routine. We become addicted to it. When you leave, life might feel vacant.
The same applies to people who had certain goals for work but couldn't achieve them by the time they retire. If you don't feel fulfilled and accomplished at work yet, you might not be emotionally ready for the big change.
Summing up, planning for your retirement in advance is very necessary. It will not only ensure a safe, healthy, and secure retirement. But it will also boost your productivity at your current job. With a satisfying goal and practical goal in sight, you will be able to do better every day!