During our youth, retirement feels like a distant pipe dream. It’s only as we grow a little older that things start to change, and we then start to consider once-unnecessary topics (such as pensions!).
Today is all about helping you transition to that retirement state as seamlessly as possible. There are a lot of misconceptions that do the rounds about retirement, one of which is that life suddenly becomes all-too-easy now we are not blighted by the world of work. As it turns out, this couldn’t be more from the truth, and today will talk about some of the key areas you have to plan for.
The Financial Plan:
We’ve already talked about pensions, but in reality, this is the tip of the iceberg with financial planning.
Sure, having your pension in an optimum state is going to help you considerably, but there are more. For example:
- What do your new costs look like? You’ll probably have new hobbies (more on that later), while extra, unthought-of costs also creep into the picture (with things like funeral costs being one of these). Make sure you write out how much your new-look life is going to cost.
- Do you have any debts? Hopefully, the mortgage will be paid by now, but this isn’t a foregone conclusion for everyone. There might be other debts as well that are lurking around, all of which is going to hamper your new, reduced income.
- What about savings or investments? In truth, both are essential for a happy, wealthy retirement. Savings will be the backbone and your safety net, while investments will provide you a little extra financial power. If you have invested in the past, make sure you shift your money to less-risky options to safeguard your pocket in case of a market crash.
- And are you planning to take out any insurance? Providers like globe life offer many things which you can cover from accidents, to healthcare, to life insurance. If you do take out insurance this will be an extra monthly expense to consider, but should the worst come to pass, it can prevent the loss of more funds.
The Emotional Plan:
As we have already alluded to, a lot of people believe that retirement is some form of nirvana. While it can be for some people, for others it is almightily difficult. After all, this is the first time in your life where you are in complete control of your time, and such control can be quite overwhelming for many people.
This is where you need to put together an emotional plan that can help you transition to your newly retired state. Think about the following questions:
What are you going to do in your spare time? For the last few decades, your days have been consumed with eight hours of work (plus the commuting). The last one thing you want is to be sat at home wondering what to do; have a think about what is going to fill your time.
Who are you going to spend it with? There is a fine balance with this next point. Believe it or not, some couples can grow apart during the retirement phase as they are not used to spend much time with each other. By the same token, you need social interaction, so make sure that you find a happy medium with family. Making friends is difficult in later life, so this is something you must think very carefully about.