Preparing for retirement is essential. For a person preparing both financially and emotionally for retirement, there are numerous seminars on topics such as insurance, lifestyle, retirement income, and relocation. With all this information out there, it’s sad to note that few workers utilize the information. Here are some of the lessons you need to learn about retirement:
Money is always in mind. It doesn’t matter what preparation is done or how good the sources of retirement income are; money is a concern. The ability to rebuild savings is reduced once in retirement. Handling significant unexpected expenses from a retirement savings account jeopardizes your financial future. Have emergency money set aside beyond monthly expenses to handle unexpected costs and have a system to replenish that fund.
Think of retirement income as a 3-legged stool: social security, employer plan savings (pension or IRA), and other savings. A secure retiree should have funds in each of these three legs. Nowadays, most Americans have no company pension but a 401 (k) plan. Most people want to maintain their lifestyle after retirement – that isn’t easy. The aim here should be retiring with enough income to replicate 100% of your base salary rather than aiming for the standard 80%.
Inflation is real and counts — plan for increases in property taxes, rent and healthcare spending. There’s no way inflation can be escaped.
Besides income, get ready for the transition to retirement. It’s not easy to let go of the professional life, making it challenging to transition to retirement. Busy or bored? This item is a personal choice, and at first, most people prefer things such as playing golf, going fishing, or just staying in the house. Being busy is great, but make sure you are busy doing what you love. Activities that you like or are passionate about will last longer and be more satisfying than activities that only take up time.
No friends. Working with people for many years makes personal relationships seem like they are based on more than just business. The reality strikes when retirement kicks in. Real friends will remain, but acquaintances will disappear. So be ready, and don’t be surprised when “let’s keep in touch” doesn’t happen.
Talk about retirement as a couple. Sometimes retirees expect a lot from their spouses after retirement. No one has to change their activities because the other one is retiring. Talk and agree on the time you can spend together.