Updated: Jan 27
Retirement planning can be difficult at times and downright scary. I think that is why people put off the process entirely. It is easy to get caught up in fear of the questions: "Will I have enough?" "Will I even be able to retire?" "Will I run out of money?"
How about some tips to make things a little easier?
Tip 1 - Run a scenario that you can live with and alter if and when things change
Sometimes the retirement planning process can be daunting. It is the feeling that you have to be perfect and have the absolute correct answers to the questions:
How much are you going to need per month?
When do you start social security?
How much do I truly need to save?
When do I need to retire, and so on?
Since change is constant and guaranteed, take the pressure off and develop a set of numbers that you can live with and adapt the numbers and the planning process as you go along.
Tip 2 - Declare your Financial Independence Day
Re-frame retirement by referring to your retirement date as your financial independence day. That is the day that you can choose whether you want to earn an income or not. It is easier to focus on options than deadlines. You might not be ready to retire at that pre-set date. The good news is whether you prepare or not, you know that you can.
Tip 3 - Build an Emotional Game Plan
Retiring after being in a career for decades can be tough emotionally. You have then likely been doing the same thing for decades day after day a well as interacting with the same people. Start years before your retirement date and consider what this next season of your life will be. Think about what will you do with your life? What will your new purpose be? How will you serve? Don't make the emotional mistake of waiting until retirement to figure out a game plan. It is easier to deal with the emotions of change when you have something exciting waiting for you.
Tip 4 - Get a Pre-retirement Plan
As well as a way to ease into retirement: Say you want to retire from a decade's long stressful career. However, you still want to work. Then say goodbye to your current job and start another adventure by doing something that you have always wanted to do but could not afford to do financially. You have declared your financial independence day. As a result, money is not a driver. Now, begin something that is not stressful and gives you that feeling of purpose. Having said that, if retirement accounts are not where they need to be, this also is an excellent strategy to supplement your retirement income.
Tip 5 - Build a Five-year Runway
Five years leading up to retirement is a significant period. While you are still employed and earning an income, take care of some of the more sizeable financial needs before declaring financial independence. Consider these financial goals:
Pay off the mortgage if possible
Buy a new car and pay it off
Remodel the house
Repair and replace things around the house
Get out of debt
Build a larger emergency fund
The Emotional Journey
The saving and growing aspect of retiring are crucial. At the same time, you also have to get your head right along the way and prepare mentally and emotionally for that next season of your life!
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