Do you really want to retire?

Recently, the "I want to retire" syndrome seems to be an ever more common theme these days. I am even hearing a higher number of people in their early 50s, with successful careers and some with high-paying positions, say they want to retire. Here are three examples that are very common in today's environment. 

Mary is a highly educated college professor, researcher, speaker and author. She loves the prestige of her occupation, the intellectual rigor, and being a leader in her field. What she dislikes is working with undergraduate students that she finds disrespectful and unengaged in their studies. At 60, she still needs to earn a living but will retire if she cannot get rid of the unpleasant parts of her job. 

Nathan is the chief Information officer for a large public company and commutes two hours every day in heavy traffic. The job he loved changed significantly after the company's most recent merger. He has much more responsibility and much less control over his day and duties. His wife retired early, and the family is counting on his job financially as its sole source of income and has good health insurance available. 

Cindy works for a wonderful company with great benefits but is bored after 20 years of doing the same job. She works directly with the public, which has become increasingly rude and demanding. Dana has a high- paying position at a large bank. But along with a high-paying position comes mountains of stress along with more time and paperwork. Both Cindy and Dana are more than ready to retire. 

A common discussion among these retiree "wannabees" is a sense of unhappiness or discontent arising from career issues. The Ungrateful students, the rude and demanding public customers, significant chronic stress and the ongoing health concerns, and changes in company structure and leadership are all contributing factors that come into play. Retirement often seems like the first solution to such problems that people will consider. However, is retirement really the answer? Let's take a deeper look into these questions and what could possibly take place in their lives.  

Full retirement is a significant life change with lots of considerations. Retiring in your early 50s or 60s leaves you with at least 2 to 3 decades in retirement, and you will need to figure out how to occupy your time. Quitting work before you have enough financial resources for the lifestyle you envision can lead to an un-happy retirement. Having to go back to work can be harder than you think, going through the process and finding a job that fits your skill set and income needs. In addition, the discussions with your spouse to understand his or her thoughts and feelings on the matter are critical will be needed. 

If you are discussed at work and truly unhappy at work, figure out the root cause of your dissatisfaction. Maybe your current job isn't the best match for your skills? If you can make a change to put your true passions to work, what would that process look like for you. For example: If you are a trained pastry chef but are stuck working a desk, find a way to make a good living making those wedding cakes. Maybe you want to become a pastry chef and this is a great time for to seek out your passion. 

If you really want to retire, then practice a sample time period. Plan to take some time off from work and appreciate what it means for your day not to have a job. Look at not having a salary, and see what your budget would be to live as a retiree. Keep a log of the affects in your budget. were the rubber meet the road is when you live by your word. Its one thing to cut back expenses (retiree's will live on 75% of their current take home salary) and another is to turn down friends when they ask you to go to dinner or on a long weekend trip. Not taking the annual vacation and do a staycation to place the money in your retirement funds. A poor retirement is not a fun retirement. 

 

What to do if you waited too long to address retirement planning

 

When it comes to retirement the struggle is real. We put off cleaning the toilet, getting the oil changed in the car, and organizing our financial documents, really any thing else we don’t want to do. 

According to Fidelity's 2020 Retirement Savings Assessment, 46% of working American households are at risk of not being able to fund their current lifestyle during retirement. Of that 46%, more than half are likely to need significant downsizing in lifestyle once they leave the workforce. That lifestyle downsizing may involve relocating to a more affordable area or selling assets, and slashing spending on entertainment and non-essential pleasures. None of that sounds like a proper reward for working all those years.

The culprit is insufficient savings. Saving money is notoriously hard for American households. We want to keep up with the 'Jones's', It seems there's always a more pressing or more interesting use of your cash than tucking it away in your retirement accounts.

The challenge is that when you put off saving, it gets harder and harder to catch up. Then one day you wake up and you’re 55 and realize you waited too long. You're not alone in that experience, and the Fidelity report confirms it. But there's no time for fell sorry for yourself, because you've got work to do. 

 

Four steps today to minimize that downward lifestyle transition.

 

Know your finances, inside and out

Start accounting for every penny you earn and spend. know your cash flow. One important thing to establish is your financial baseline, and that involves knowing what you spend on your bills and your non-essential purchases.

Try exporting your banking, and your credit card transactions weekly and monthly into a spreadsheet and then keeping notes in that spreadsheet. Your notes should include categories for each purchases and a reminder of why you made that purchase. Start totaling up the categories to see where the bulk of your money is going.

You'll find this exercise naturally makes you more aware of your purchases and also more attuned to savings opportunities. Think of it this way: Each transaction has to be worth the time you'll spend reviewing it. For example: many have 3-5 streaming services and only watch one. 

 

Downsize your expenses

Now it's time for some pre-emptive downsizing. If you're facing a downward lifestyle move in retirement, you may as well get ahead of it while you're working. Plus, lowering your expenses immediately frees up cash for your savings.

The deeper you go into your spending, the better your options for downsizing your expenses. You might see that you can easily cut $500 from your entertainment budget. Or, you might realize that you're strapped, and cutting out some non-essentials would be beneficial. let look at some common places to look for savings include:

·      Rent or mortgage. Could you move to a smaller place? Or, down sizing from a 7,500 sq ft home to a 2,000 sq. ft home or condo due to being empty nesters. Getting out of home ownership all together so that not have the upkeep and allowing a landlord take that cost off your hands.

·      Cars. Here you need to look at your needs, are you or will you be doing a lot of traveling, is so, the an economic vehicle might be the best option. If you are 

·      Groceries and dining out. Pack your lunch, buy food that's on sale, clip coupons, choose the generic brand, and set a menu to buy, so your are not just frivolously buying food. Limit you dinning out to one to two days a week and pick an establishment that are moderately priced. 

·      Entertainment. Cancel all but your most-watched streaming service. Take leaner vacations. Invite friends in and learn how to cook meals from friends and family.

·      Shopping. Cancel one-click to buy shopping, like Amazon Prime or the credit card e-wallet features type person. Remove credit cards from your wallet and e-wallet if you like to shop for fun. You can still shop, you just have to cut back on the buying. it is good to look at what is essential and non-essential items.

 

Set an aggressive savings goal

You know your spending, your expenditures, look at the area’s that need to be cut back. Set a target challenge yourself to a achieve a big monthly savings amount. This can impact your retirement planning strategy, this right her can make a big difference in when and how you retire. Catch-up contributions, are the best way to save if you are over 50 years of age. In 2020, you can place up to $26,000 in a 401(k), including those catch-up contributions. The limit for IRAs is $7,000, including a catch-up contribution.

 

Develop other income sources

If your need to identify some ways you can supplement your income in retirement without having to work too hard for it. Dividend income and interest income are a great way to accomplish this, but they require cash to be placed in an investment account.

Real Estate is a great way to produce income. You can explore single-family homes for sale that can be used for rentals, But be careful. Work with someone who can help you navigate through projected cash flows, identifying protentional properties, and making sure that the deal works for you.  

You might find contract positions that allow you to work from home or in your spare time. You can even try Fiverr or Upwork if you have skills for freelance work, such as writing, voice over, graphic design, and many others.

You could also rent out your assets. These days, there are many specialized peer-to-peer renting websites beyond Airbnb. Try Uber to pick up ride for hire, Spacer to rent your parking space, RVshare to rent your recreational vehicle, and Turo to rent your car to name a few ideas.

There are many options in today's market place to create extra income. 

 

It's not too late to save

The only remedy for procrastination is action, you are the only one that can make this happen. Get up and go make a smart money moment. Your Retirement depends on it. 

 

 

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