Make the transition into retirement a little easier
If you’re thinking about retiring soon, you probably have a lot of questions. Many Americans aren’t sure about when they can afford to retire and how large their retirement nest egg will need to be.
When you’re evaluating the decision to retire, consider the following.
Lifestyle, work and relationships
Before you retire, you’ll want to think about the lifestyle you want to enjoy. After all, retiring isn’t just about the money. More than anything it’s about enjoying life, your hobbies and interests, your family, friends, and more.
Here are a handful of questions you should ask yourself:
Leisure and activity
- Do you have a plan for how to spend your weekdays when you’re no longer working full-time?
- Have you talked to your spouse about whether living near your children or grandkids is important?
- What personal goals have you identified for retirement?
- Are you emotionally ready to quit working?
- Have you thought about whether you will continue to work, even part time, after you retire?
- Are there any skills you could easily transfer to a new part-time job?
- How will various aspects of your retirement positively or negatively affect the relationships you have with family and friends?
- Do you understand your goals, dreams and interests for retirement?
- What is your plan for spending your weekdays when you’re no longer working?
In order to retire, you’ll need to be able to cover your retirement living expenses through your retirement savings, Social Security benefits, and other sources of income. 80%-100% of current income replacement is a good target.
Health and longevity expectations
Your current health, family medical history, and lifestyle can help you estimate how long you might expect to live in retirement and how much you should budget for healthcare expenses.
Spousal age and status
If you’re married, work together with your spouse to determine a retirement timeline that suits both of your needs.
Eligibility for benefits
Talk to your employer to understand your full benefits, including any health insurance coverage that can bridge the time until you and your spouse become eligible for Medicare.
The decision about when to retire depends on your personal circumstances. Speak to a financial representative who can help you understand how your age, finances, health, and sources of income factor into your retirement calculations.