Retirement is a very huge decision to make. You have to be ready about life after you stop working, it means that your finances will also stop. If you want to retire you have to be solid about your decision and you have to consider investment plan and finance management. If you want to know if you are ready to retire, here are 7 signs to consider.
1. Monthly Financial Plan Is Not A Priority
You have to consider planning your monthly cash flow because once you retire your salary will stop but your bills keep on showing up. Mapping out your monthly cash flow means considering when you will start drawing Social Security benefits and how much you will receive. It also means that you will have a solid grasp on your expenses. You have to look in your actual financial spending history that is summarized by category to determine how it might change during retirement. Some of the expenses may go down like debt that can soon be repaid, but the travel, healthcare cost, and recreation expenses may possibly go up. You have to know how much income you’ll need each month so you can assess whether your finances is large enough to allow you to retire, or whether you need to keep on saving money or cut your anticipated retirement expenses.
2. Paying The Current Bills
Most people struggle to pay their current bills. Randall Greene, a financial advisor recommends that retirement-minded clients plan to live off 75% of their pre-retirement income. The 75% figure is a basic rule that assumes reductions in outlays. It is no longer contributing to a retirement plan, it is no longer saving for a child’s college education and no having job-related expenses like work wardrobe and travel fares. But, According to Greene, that figure might become higher or lower depending on the taxes paid on the retirement account withdrawals. It also depends on how you plan to spend your retirement.
3. Hollding On To Your Job
There is no proof that you have to retire if you reached the Social Security definition of full retirement age. Most people are still working beyond their retirement age and still no plans on retiring. They do this because they love their job.
Greene says that if you woke up in the morning and you still have the excitement of going to work, it is likely that you are not yet ready to retire. He also said that it’s okay to continue living the life to the fullest and you should enjoy every minute of it. It has benefits beyond the financial, it gives you purpose in life and creates a sense of accomplishments. These can help you stay healthy as you age. Just make sure to stay on your employer’s health plan to get better coverage for your health.
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