Questions to Ponder Once You Have Enough Money to Retire

Having the financial option to retire doesn’t always mean you are ready.

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Having a nest egg big enough to sustain you in retirement may seem unimaginable. But there will come a day when many people will get the opportunity to figure out whether being employed is still a desirable proposition because they no longer need a steady paycheck. If you follow prudent retirement savings steps and find yourself in this enviable position, consider these five questions before you hand in your resignation letter:

Is your plan stress tested? The greatest threat to your retirement sustainability is likely to be your investment performance during the first few years of your retirement. You need to make sure your retirement finances will remain intact if the stock market tanks or you have a financial emergency in the first few years of your retirement. Make sure your retirement finances are based on realistic projections that include the possibility of things going wrong. Simply reaching a made up savings goal does not ensure that your money will last throughout retirement.

Do you really dislike your job? Retirement is a financial goal everyone needs to prepare for. But quitting as soon as you have enough isn't always prudent. You may find that you enjoy working once you no longer depend on that paycheck and don’t feel as stressed about making mistakes. Don’t base your decision to quit your job solely on the financials. Make sure you are really better off without employment before you resign.

Is your family comfortable with your retirement? I don't mean that you can only retire if someone else is OK with the decision. But your family will certainly have to adjust financially and emotionally to you being home all day, every day. The subject of appropriate retirement timing should be discussed with immediate family members well in advance. Money discussions with loved ones are often difficult, but it’s important to make time to vet out the pros and cons with everybody involved. Even if the discussions won't change your decision, you will at least give yourself a chance to explain how you came to the conclusion so everybody can understand where you are coming from.

Will anyone else be affected by when you actually retire? Your family may need the extra income you would bring in if you delayed your retirement. Your coworkers might also appreciate your expertise on a project until it's complete. There are many situations where delaying your retirement by just a few months (or even a year) will help someone you associate closely with tremendously. While you don't want to live your life just for other people, why not make someone else happy if it won't cost you too much?

What is your plan for the first three months of retirement? Many retirees take a while to settle into a comfortable routine. It can be beneficial to come up with a game plan for the first three months of retirement so you will have at least a rough idea of how to spend your time. Having a plan will also limit the risk that you will spend excessively during the first few months of retirement. Plus, planning the first three months of your retired life is fun now that you will have lots of personal time for the first time in a few decades.

David Ning runs MoneyNing, a personal finance site that shares money moves you can make to significantly increase your chances of having a comfortable retirement. He likes to share simple changes that anyone can make, such as picking the best online savings account and figuring out whether a 0 percent balance transfer credit card makes sense.