Perhaps you love your job. You appreciate the mental stimulation, you like the people you work with, and you enjoy having the structure that a job creates. If you are contemplating retirement with some trepidation, don’t rush it. If you are enjoying your life the way it is, don’t retire just because you have reached a certain age or a certain retirement account balance. But if you feel like work is getting in the way of your enjoyment of life, and you think your finances are on track, here are a few tips to get past those retirement jitters.
Practice your retirement budget. If you haven’t made an attempt to figure out your retirement budget, you’re not ready to retire. But even with a budget, it’s best to take it for a test drive before you retire. If your budget calls for you to dine out less often in retirement, try that now and see how it feels. Maybe you will be giving up a professional house cleaner in your retirement budget. Try cutting back to half-time now to see if you really will be up for scrubbing your own tub. Whatever sacrifices you have built into your future budget, make sure that you can live with those compromises now.
Analyze the budget. There are probably some parts of your budget that you can’t test drive while you are still working, including commuting costs, payroll taxes, and contributions to retirement plans. Take a look at your spending and add up all the costs that will go away once you retire. Then do your homework on all the costs that will go up. Get quotes for individual medical coverage, explore long-term care insurance, and build in the cost of increased travel if that’s part of your retirement dream. Much of your budget will be for basic living expenses such as housing, utilities, and food. Add up all the expenses that are discretionary in nature, such as entertainment, travel, and education. This is your cushion. Even if you’re retiring before you’re eligible for Social Security benefits, find out now how much you’ll be getting and consider the best time to start receiving those benefits.
Formulate a plan B. It’s natural to worry about whether your retirement calculations are accurate. No one wants to be left outliving his or her nest egg. Even the best retirement projections are vulnerable to unexpected circumstances. Stop worrying about the precision of your plan. Instead, decide exactly how you will respond if you have to make adjustments along the way. Here are a few ways to make your budget more flexible.
- Part of your budget was for discretionary expenses. In a pinch, you’ve got a little breathing room here.
- Would you be willing to move to a lower-cost location? Explore where that might be.
- Would you be open to downsizing your home? Moving to a small condo at some point may be a more attractive option than maintaining a large house.
- Would a reverse mortgage be a viable option for you? Learn about that now so you know exactly what is involved.
- Would you be willing to pick up a part-time job or start a little business in retirement? If you’ve got some ideas for a new way to make money, now is the time to start learning, especially if it’s a new hobby you might enjoy anyway.
Explore your interests. Maybe your retirement jitters aren’t caused by money at all. Perhaps you are worried about filling up all that extra time. Take your hobbies for a test drive too. Are there any interesting classes offered through your local adult education or community college system? Explore those now and you’ll turn that nervousness into excitement for the next phase of your life.
Seek professional help. To really get yourself comfortable with your retirement plan, it may be worth a visit to a fee-only financial planner. Think of it like therapy—if it helps you to sleep better at night, it’s worth the extra expense.
Sydney Lagier is a former certified public accountant. Since retiring in 2008 at the age of 44, she has been writing about the transition from productive member of society to gal of leisure at her blog, Retirement: A Full-Time Job.