Many people rush to retire only to regret that decision after that. If you are getting ready to leave the workforce for good, be sure to answer these important questions first.
1. What will my monthly pension income look like?
You may have a number of income streams available during retirement, from social security to personal savings to money from a part-time job. The key, however, is to find out how much monthly income you can reasonably expect, and decide if it will be enough for you to live comfortably.
If you are close to retirement, estimating your social security benefits is quite easy. Just look at the latest Social Security Administration income statement (if you don't have a hard copy, you can get it online) and see what your monthly payments look like. Keep in mind that the age you claim benefits can cause the number to change, but at least you want a ballpark.
Next, consider your nest egg. As a general rule, you can aim to withdraw about 4% of the savings balance each year and not run out of money for about 30 years. Therefore, if you are sitting on $ 500,000 in the IRA or 401 (k), it will give you $ 20,000 in annual income, or $ 1,676 per month.
Finally, think about the work you want to do. Want to get an actual job, make money from an existing hobby or start a business? Or don't you want to work at all? Either way, do your best to land on an estimate, and then pick up the various sources of monthly revenue to reach the total.
2. What will my monthly living expenses entail?
Once you have decided what your monthly pension income should look like, you need to see how this figure matches your expected expenses. To achieve this, create a retirement budget that maps all running expenses, from housing to food to transportation to Medicare premiums, and see what the total looks like. If the expected revenue is enough to cover your costs, you are in good shape. Otherwise, you may have to either postpone your pension or adjust your expectations to avoid financial problems.
3. How do I actually want to spend my days?
Boredom can be a serious problem during retirement, especially when it paves the way for mental health problems. In fact, retirement life increases the likelihood of suffering from clinical depression by 40%, according to the Institute of Economic Affairs, and a big reason for it boils down to the fact that seniors feel that they no longer have anything meaningful to do with their time. [19659004DeterderfordeteravgjørendeåhaenspesifikkplanforpensjoneringKanskjevildubrukehalvpartenavdennyvunnefritidendinsomfrivilligarbeidogdenandrehalvpartenpåhobbyeroghjemmeprosjekterEllerkanskjedureiserienukehvermånedogbrukerrestenavtidendinpååtakursspillegolfogbåndmedbarnebarnadineValgeterdittmenpasspåatduvethvordandagenedinevilblifyltførdularkarrierenståigjen
Make sure your finances can support the plan. If you do not have the income available to do the things you really want to do, it may make sense to retire a few more years, work a little extra and increase your savings to buy you more options.
The last thing you want to do is retire when you're not ready. Be sure to answer these important questions carefully before you finish your career. Otherwise, you can wind up cash tapes, chain and disappointed when the golden years started.