After years of hard work, you’re certainly entitled to a happy retirement. However, what it really takes to retire is a solid grasp of your budget, a carefully considered investment and spending plan for your life savings, debt that’s under control, and a plan you’re excited about for how you’ll spend your days.
Not having an investment and spending plan
One of the biggest stumbling blocks with retirement is working out a budget beforehand so you know exactly how much money you’ll need to maintain your desired standard of living. According to The Association of Superannuation Funds of Australia (ASFA), you need to budget for $43,255/year as a single and $61,061/year as a couple for a comfortable retirement. You are going to retire for a very long time, so you need to understand how long your savings will last and what spending level you can maintain over the coming decades.
Still having debts / major expenses ahead
You don’t want to wait until you’ve retired to address major, foreseeable expenses such as replacing your roof, repaving your driveway, purchasing a vacation home, or buying a new car. If you’re entering retirement with debt in tow, they can continue to affect how you spend and the type of lifestyle you’re able to enjoy. Before you hand in your retirement notice, try to whittle down most if not all of your outstanding debts. When there’s no debt in the picture, you have much more flexibility in how you budget and spend your savings.
Retirement worries you / you still love your job
Working has benefits beyond the financial. A job you enjoy engages your mind, offers social interaction, gives your days purpose, and creates a sense of accomplishment. For some people, thinking about months and years of unstructured time ahead may cause them feeling anxious rather than excitement. That is why proper planning and consideration is essential as many pre-retirees do not fully comprehend how dramatically their lives will change. There are no hard and fast rules for retirement, you could choose to continue to work like Warren Buffett if this life suits you, or you could slowly ease yourself into retirement: Early Semi-Retirement: Work Options and Fun Activities
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