12 Signs You Are Ready To Retire
Andrew Rutter
Author, Podcaster, Art Gallery Owner, Artist, Wine Enthusiast, Music Lover, Consultant, OBGS President.
This article outlines 12 Signs that you might be ready to make the transition into retirement.
1. You constantly daydream at work
Wouldn’t it be nice to win the lottery? Or travel the world with your partner? While everyone daydreams, if you find your little fantasies are distracting you from work, it might be time to leave and go after those dreams for real.
Daydreaming is often symptomatic of escaping from the stresses and pressures that are going on in our reality and they become a way for us to retreat from that reality. An extreme example would be someone in prison who might spend much of their days daydreaming about what life would be like if they were released. If this is the way you are feeling when you are at work, you either need to change-up your work situation or, if your Maths, Mindset & Health issues are aligned, make a call to transition into the next phase.
2. You live for the weekend
Do you get hyper-excited by the time Friday rolls around? We’ve all been there, but if you find you begin to dread going back on Monday, it might be time to consider giving work the boot or change jobs.
For some, you might reach a point where your job becomes tedious and is not exciting you like it may have in the past, or the prospect of a promotion or career enhancement does not hold any appeal.
A good friend and ex-work colleague, Adrian Emery, reached this point when he came to the realisation that “issues that once were important at work now seemed more trivial and I realised that accepting that the next promotion would actually be hell and probably cause me health issues.”
?3. You’re jealous of your retired friends
If you’re the only one in your friend group still working, you might feel a bit left out hearing about all the free time your mates have.
You might have a case of FOMO (a fear of missing out) with respect to the lifestyle your retired friends are living. Conversely, your friends are probably experiencing JOMO (a joy of missing out) with respect to the concept of still working. Whichever OMO is going on, if the grass appears greener on the other side go and check it out - it probably is!
4. You have a countdown to your retirement
Trying to stave off retirement until a certain age? You’d be surprised how many people use countdown apps and calendars to track their progress towards that happy day.
Even if you don't have a specific date in mind, having a target month or year - perhaps end of financial or calendar year? - is important so you can plan out the things you need to achieve or complete by that date.?
My book contains goal setting frameworks and SMART goal setting which might help you plan out the actions steps you need to put in place to achieve your target date for retirement.
5. You are ready to handover your role
If you have been in a role for many years, you may have lost the passion for what you are doing and are ready to pass on role responsibilities to the next generation. Perhaps you have been mentoring someone and it is time to get out of their way for the good of the business.?
As my friend Mark Hardgrave said when contemplating his transition, “one day you see the young guys and girls coming along and realise it is their turn to shine.”
Sometimes, it is time to handover and move onto something new that excites you knowing you are leaving your responsibilities in good hands.
6. You're Debt-Free
If you've paid off all your debts, you are well-positioned for retirement. If you have credit card debt or still owe a lot of money on a home or car, you may want to postpone giving yourself over fully to your days of freedom.
When you’re on a fixed income, a?hefty mortgage or car payment can put a major strain on your finances. It also makes it more difficult to deal with unexpected expenses. Before you hand in your retirement notice, try to whittle down most, if not all, of your outstanding debts.
This is part of the Maths side of things that you need to discuss with a financial adviser. If you have not accessed an adviser before this stage of your life, retirement is such an important and big step you should take the time to consult with a professional. You are transitioning from working and earning income, to living off your accumulated income and/or investments. Plus, there are a myriad of issues to consider - tax, investments, good debt, bad debt, spending habits, savings, to name a few - that need to be considered in your overall planning.?
7. You're No Longer Supporting Kids or Parents
Are your kids all grown up, out of the house, and earning their own income? That makes it a lot easier for you to retire.
However, if you're still financially supporting your kids or helping them out regularly, you may want to put your retirement plans on hold for a while. You might also hold on if you have elderly parents who need your financial support - or may need it down the line.
Financial adviser Brendan Murray says, “Supporting aging parents or kids at home is becoming more expensive as schooling and housing costs continue to rise. There is no way a couple can downsize and start minimizing their expenses if they have financial dependents.”
Everyone is in a different situation financially. But put simplistically, if you no longer have financial dependents, you only have to worry about your own circumstances.
8. You've Created a Retirement Budget
This may seem like a no-brainer, but many soon-to-be retirees don't crunch the numbers. Before you ditch your career, it's important to figure out whether you can?live comfortably on your post-retirement income.
Start by adding up your must-have monthly costs, including mortgage or rent, groceries, electricity,?and other utilities. Then add in your "wants," such entertainment, shopping, and dining out. Once you’ve calculated your estimated monthly expenses, it's time to figure out whether you'll have enough income to cover them.
Do you have any lumpy expenditure items that you can include in your plan? House renovations, Car replacements, Travel? These need to be factored into your plan.
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Add up your estimated superannuation benefits, pension payments (if you get them), investments and any other sources of income you will have.?
As we said before, there are some basic concepts you should have a grasp on.
Do you have enough?
The more you are certain that you have enough net income, the more choices you will have. The more choices you have in life, the more freedom you will have and the less stress you will have.
9. Your Portfolio Is Updated
How long has it been since you took a hard look at your investment portfolio?
There are three parameters that influence one’s ability to live off one’s savings at the onset of retirement.
If you haven't done a portfolio check-up in a while, now is the time to do one. I recommend you undertake a portfolio review annually. Every year you should be doing a projection based on your portfolio returns and spending habits. The goal is to live the lifestyle that you are comfortable with.?
The concept of lifestyle affordability is an important one. There is a lot of evidence to suggest many retired people live in fear of running out of money.?They take the minimum withdrawals from their aged-based pensions or savings, and live pretty miserable and abstemious lives, only to die with mountains of assets (which get left to the kids).
Are you planning your retirement lifestyle, or planning to maximise your what you hand to the next generation? These are important concepts to reflect upon and discuss with a professional adviser if you need guidance.
10. Your Spouse Agrees
Unless you live alone, retirement doesn’t affect just you. Retirement is a decision for you and your partner to make together.
One factor to discuss is how the reduction in your income will affect your partner. If you and your spouse are both financially and emotionally ready for it, you’ll be more likely to enjoy a fulfilling retirement together. If your spouse intends to continue working for many years, your retirement may be much lonelier than you expected. On the other hand, retiring at the same time if both partners have jobs can be both a financial and a psychological shock. Work out the best timing for each of you and both of you.
Communication is always important, especially when it comes to your household finances. Being on the same page in terms of your retirement plan will help bring you peace of mind about transitioning into your next phase in life.
Communication is also important in terms of the expected lifestyle you and your spouse expect to lead in retirement. Will you get in each other's way? If you are used to one of you working whilst the other is at home more often, will you crowd each other's space? If you start to invite yourself into aspects of your spouse's life that he/she once did solo, what are the ramifications? Will this create conflict? Resentment? Frustration?
In a life partnership, it's important to discuss boundaries. What will you do together? What will you do solo? Even if you have been together for a long time, a lifestyle event such as retirement is a big change that deserves some discussion and agreement.
11. You already have your retired life planned out
Do you know how you’ll spend your retired years? For most people, retirement is the first time in decades that they can finally pursue their hobbies and passions.
If you have things planned out, you probably have developed some form of bucket list of things you want to pursue. If not, you can find some useful tips on how to create a bucket list in my book.
12. You have a strong support network?
Transitioning to retirement can be a massive emotional upheaval. Ask yourself – do you have a network of friends and family that can help ensure the process is smooth sailing?
When I was first contemplating this post-work phase I reached out to four friends who had recently taken the big step.
It turns out there were divergent views on the way to go about finding reason, meaning and purpose in retirement and these concepts meant something different to every individual. However, everyone agreed that they had spent considerable time thinking about how to productively fill their weeks and take on new challenges to keep their mind and body active.
Having your own “Retirement Club” allows you to learn about the experiences of others as you develop your own plans and goals.
More thoughts on this topic are contained in my book,?My Future’s So Bright…I Gotta Wear Shades,?a practical workbook including 18 fun but life changing exercises, a signature goal setting tool, Planning checklists and Bucket List ideas designed and built for those seeking to live their best life in Retirement. It’s not about the Maths of retirement, it’s about the Mindset, the Psychology of Retirement.
Consider buying a copy for your clients, your friends or family who are considering retirement. It will help them define their purpose in this next phase of life, build self-belief to design this next phase, and help them build a roadmap to achieve their dreams and goals.
Links to obtain copies of the book are via?www.ruttsy.com.au
Or you can simply go to the?Amazon,?Booktopia?or?Barnes & Noble?websites.
I'm available to present concepts in the book to your clients. Please DM me if you are interested in me speaking at client events or conferences.