3 ways to know when you’re ready to retire

There’s a pretty good chance that your parents and grandparents retired just because they turned 65. Today’s retirement is a bit more complicated than that. While age is still an important factor, your ability to connect your financial resources to your lifestyle goals is what will truly determine if you’re ready to retire.

Here are three important boxes to tick before you crack open your nest egg:

  1. You’re financially ready.

The most common question we receive from our clients is, “How much do I need to retire?” While there’s no magic number to hit, a few key checkpoints are:

  • You have a budget. Many clients who are preparing to retire tell us they’ve never kept a budget before. If you’re in this category, now is the time to start! If you have any big plans for early in your retirement, like refurbishing your home or a dream holiday, let us know so we can help you prepare your finances.
  • Your debts are paid. No, you don’t necessarily need to pay off a fixed-rate mortgage before you retire. But try to reduce or eliminate credit card balances and any other loans that are charging you interest.
  • Your age and retirement accounts are in-sync. If you’re planning on retiring early, be sure that your retirement accounts won’t charge you any early withdrawal penalties for which you’re not prepared. 
  1. You’re emotionally ready.

We spend so much of our lives working that our jobs become a large part of our identities. Rediscovering who we are once we stop working can be a major retirement challenge. To prepare for this emotional transition: 

  • Talk to your spouse ahead of time. Don’t wait until your last day of work to discuss how you both feel about retirement. What do each of you imagine life will be like? What are the things you’re most excited to do? What are you afraid of? What steps can you take to make this new phase of life as fulfilling as possible?
  • Make a list. What are the things you’re passionate about? Something you’ve always wished you knew more about? A skill you’d like to develop? A cause that’s important to you? An ambitious business idea that was too ambitious for your former employer?
  • Check that your estate plan is in order. It’s understandable that many people avoid this part of their retirement planning. But putting together a legacy that could impact your family and community for generations can have tremendous emotional benefits. The peace of mind that comes from knowing the people you care about are taken care of can empower you to worry a little less and focus on enjoying your retirement.
  1. You’re ready to do new things.

Ideally, the financial piece of this conversation should make you feel free enough to create a new retirement schedule based on the emotional piece. Plan your days around the people and passions that get you out of bed in the morning. Some ideas:

  • Work at something you love. Take a part-time job at a company that interests you. Turn that crazy idea you couldn’t sell to your old boss into your own business. Consult. Teach. Volunteer.
  • Keep learning. Brush up on your French by enrolling in an online course. Learn some basic web design so you can showcase your photography portfolio or create an online store for your art. Sign up for cookery classes and get some new meals in your weekly menu.
  • Get better at having fun. What’s the best way to lower your handicap or perfect your backhand? Take lessons from a pro. The second best? Organise weekly games with friends and family.
  • Travel. Planning a big holiday can be a fun project for couples to do together. And while you’re looking forward to that dream adventure, take a few weekend jaunts out of town. Stay at the new bed and breakfast you keep hearing about. Visit your grandchildren. Hit the road and enjoy a different city.

If you’re nearing retirement and struggling with any of the above, working with 1st Chartered might help provide you with clarity so you can get the return on life you’ve always wished for. 

Feel free to get in contact so we can discuss how to get you ready for the best retirement possible with the money you have.