Guest post by Riya Sander
During the early years of working, you probably viewed retirement as a far-off dream. As retirement looms closer, however, the thought of leaving behind the familiarity of work can raise questions about your readiness. As you are planning for your retirement, you might be asking yourself the following questions. Luckily, we have answers.
1. How much savings will I need?
Financial matters are the most critical ones to consider before retirement. Retirement isn't feasible if you don't have enough money to live on. When you're considering the sufficiency of your savings, first think through how much money your retirement lifestyle will cost you each year. Social Security will replace a small portion of your income but it won't be enough to fully fund your lifestyle. The remainder will have to come from savings or a pension plan, if you are fortunate enough to have one. The general rule of thumb is that you need to have enough in savings that withdrawing just 4 percent annually will be enough to fulfill your needs.
2. Do I need a financial adviser?
Withdrawing money from retirement savings is not as straightforward as it might sound. For example, you could opt for fixed withdrawals, variable withdrawals, or living off interest. If those terms don't mean much to you, then you most certainly need a financial adviser who can guide you through managing your withdrawals. In fact, even if you do understand that list of options, having a financial planner is still smart. Retirement brings with it new financial and tax scenarios, and a pro can help you navigate these with finesse.
3. Is it important to make a will?
Yes, you absolutely need a will. In fact, you should have a will in place well before retirement, but if you don't, now is the time. A will outlines your wishes for how you want your assets distributed after your death. Without one, those decisions fall to the probate court. Having a will allows you to specify what happens to your assets after you pass, and it also reduces the burden of decision-making on your heirs. In fact, even if you already have estate planning documents in place, entering retirement is still a good time to reevaluate your wills and estate planning. As your life changes, so too should your documents.
4. Do I have a social network?
Like it or not, your co-workers probably comprise a good deal of your social network. Whether you truly like your coworkers or merely tolerate them, at least they provide human contact. When you retire, you will leave the social network of the office behind. If you do not already have an alternative group of friends in place, loneliness in retirement could set in quickly. If you do not have family nearby or an established group of friends with whom you spend time apart from work, look for ways to increase your social connections before you retire. Consider seeking out new friendships through clubs, religious institutions, volunteer programs, and senior centers.
5. What will I do with my time?
During your younger years, you probably envisioned retirement as an endless stream of carefree, blissful days. Now that your retirement is becoming a more imminent reality, that vision may be replaced by fears of absolute boredom day after day. You could have years ahead of you to fill with activity, especially if you retire early. So, consider what you would like to do with your time. Do you have volunteer goals? Travel dreams? Family and friends to visit? If you can craft a reasonable, appealing plan for how to fill your days and weeks, that will help you ease into retired life. But if the question of how to fill your days feels overwhelming to you, it may be better to stay the workforce a while longer.
6. Would I be willing to go back to work?
Despite all the best planning, life is unpredictable. You could find yourself with major expenses you weren't prepared for or discover that you require more money than you had anticipated. Consider whether you'd be willing to put your retirement lifestyle on hold and reenter the workforce improve your financial situation. If the thought of going back to work post-retirement would be positively dreadful, you might prefer to keep working and increase your nest egg instead of entering retirement now. If you did return to work post-retirement, would you go back to your current field or do something new?
If you think you would reenter your field of expertise, it's important to consider ways to stay connected and in touch with the industry. If you would like to try something new, you should evaluate what other skills they have to offer and seek training to close any knowledge gaps you may have.
About the author: Riya Sander is an inspired writer, passionate about traveling, lifestyle and encouraging startups. As a freelancer, she understands the importance of productivity at work. She never stopped finding new ways to create her work productivity. Follow her on Twitter.
Learn more about the 8 important steps to writing a will here.
Answers sign: geralt.
Two laptops: Helloquence.
Planting money: TheDigitalWay.
Outdoor party: Michael Button. Some rights reserved.
Man looking at watch: GESHOOTS.
Man at desk: Pexels.