As we approach retirement age, the time will no doubt come for us to sit down and take a stark look at our financial and personal situations in order to determine whether or not we are ready to enter into this next stage of life.
It can all feel a little overwhelming – not least of all because very few of us are equipped to know exactly what needs to be done, and what boxes need to be checked. For this reason, we have put together a few vital questions to ask yourself in the years leading up to your retirement. Read more below.
Am I Planning for One, or for All Eventualities?
Most of us have a dream for our futures. Whether we want to retire and spend our days in nature, hiking and camping and refusing to grow too familiar with the comfy chair, or use those decades of hard work as the perfect excuse to take it slow, steady and predictably, the majority of people have an intention – a pretty specific series of hopes – for the future.
There is nothing wrong with that. In fact, it is a wonderful thing to find joy in what remains largely unknown.
Still, the very fact that are futures are still big ‘unknowns’ on the horizon means that we cannot afford to fixate on just one eventuality. There are a great many variables, and some hold pretty significant consequences if they aren’t addressed sooner rather than later.
We are, of course, building up to the idea that taking out a life insurance policy is vital – if, of course, you haven’t done it already. Life insurance covers myriad scenarios, and ensures that your loved ones are not left hanging in the balance should something not go to plan.
These days, it is incredibly simple to get a life insurance policy without a big song and dance. Some leading insurers offer life insurance with no medical exam, meaning that you needn’t interrupt your life just to get a quote.
Planning for all eventualities isn’t always exciting, but it is the only way to ensure that you can move onto the next stage of your life without living in fear of the worst.
Are My Finances Ready?
This is a question we should all ask ourselves, although the answer will look entirely different for everybody. Preparing our finances for retirement is a process that should ideally begin many, many years prior – decades, even – and something that we should revisit regularly in order to understand where we stand with regards to our goals and ambitions for retirement.
From checking your state pension to regularly reviewing your average monthly and yearly expenses, planning for your retirement is as much about understanding your finances now as it is about predicting what they will look like after you exit the world of work.
What Will I Do?
Financial preparedness is one thing – and cannot be overstated – but there is such a thing as emotional preparedness. While it may seem all sunshine and roses when you’re sitting through another mind numbing two-hour meeting, the fact remains that retirement represents a massive change in your life – and that can be difficult to get used to at first. We spend decades building a routine around work, and letting go of that routine can, to put it mildly, be harder than anyone still tied to the 9-5 can imagine.
The best way to ensure a smooth transition into your retirement years is to ensure that you have plans in place. They needn’t be as specific as, say, a 6-week cruise around Australia in June of 2023 – although, if that floats your boat (pun intended) then go ahead. What you should plan for is a retirement village or retirement community where you will eventually live that offers amenities and services tailored to your individual needs. Retirement villages often have activities that are designed specifically to keep retirees engaged in their local community and find the socialization they’ve missed since leaving the workforce. So find a village or community that speaks to you, and make sure you have a plan for where you will live after retirement. It’s one of the most important steps in making sure your transition from employee to retiree is as smooth as possible.
It may be as simple as knowing what will keep you occupied on any given day. Taking up a new hobby or two, establishing a routine, opportunities to socialize and explore more of the world will all give you that much-needed sense of purpose, and ensure that you take the very most benefit from this stage of your life.
Will I be Able to Clear my Debts Ahead of Time?
Hopefully, your finances are sufficiently in order that you will be able to live comfortably throughout your retirement years, with opportunities for vacations (and, of course, spoiling the grand children), but that’s still not to say that your money will represent a near-limitless resource.
Paying off debt will always take a toll on the finances, whether you’re in your twenties or eighties – the only difference is, your retirement years ought to represent a more relaxed time, when those financial woes have settled into a comfortable, predictable, and manageable rhythm.
For this reason, any financial advisor will attest to the benefit of paying off all your overhanging debts before you commit to retirement. In this way, you can keep a better handle on your ingoings and outgoings, and avoid any late night worries over your financial future.