Consider Early Retirement Carefully
This post will go over some of the pros and cons of retiring early, as well as provide a general timeline for retirement. We'll explore what you should think about before retiring, how to retire successfully, and how to make the transition back into a career in case you miss it.
Retirement can be one of the most rewarding periods in your life. It's an opportunity to follow your dreams or enjoy life on your own terms. But there are also pitfalls that could derail your plans and stop you from living out this period in peace or even create anxiety around spending time with family members who need care.
"The Modern Caregiver" is written by Lauren McCarthy (<a href="https://www.linkedin.com/in/lauren-mccarthy-7bb8226/" target="_blank">LinkedIn</a>) who is a writer, business consultant and caregiver. This column is meant to help caregivers with the challenges they face.
Retirement, Not Really
One of the biggest misconceptions about retiring early is that it's a reality for most people. In 2013, only 11 percent of those over age 55 worked part-time or less than full-time (www.pewsocialtrends.org). This statistic was even lower for those over age 65 (six percent left their job completely), because most older workers have to retire due to health reasons that severely impacted their ability to continue working (www.pewsocialtrends.org).
Sadly, it's a truth known only too well by the baby boomer generation that retirement isn't quite what it used to be. Over the last decade, many people in this generation have had to delay their retirement dates or take drastic cuts in income from jobs that provided a solid retirement plan. Even those who planned for early retirement found it harder than expected to create a comfortable lifestyle on their fixed incomes. The burden on these individuals is great and leaves them scrambling to find creative solutions such as getting part-time work and selling their homes and possessions to make ends meet.
Is Retiring Early Always a Good Idea?
Perhaps you have some great ideas for early retirement, but aren't sure if it's the right time. There are several questions you need to ask yourself before taking the leap. You should also go through a list of potential issues so you can be prepared for what life may throw your way later. The following are just a few scenarios that will help you see if the timing is right for early retirement:
Do You Have Enough to Retire on Your Own Terms? If not, then it could be wiser to postpone your plans until a later date when financial resources are more available.
Could You Live Off Your Savings If Necessary? If not, then it may be better to take some time to save so that you're ready for an emergency.
Are There Problems With Your Finances? Are you in debt or are your assets not preserving your income as expected? There are many things to consider before deciding on your financial future. Remember, the amount of money necessary in a retirement portfolio is dependent on how much you make now compared to when you retire. If the amount has changed drastically over the years, it may be best to plan on delaying your retirement until there is more growth (or at least similar levels).
Do You Have the Right Health Care Coverage? If not, then it may be wise to delay your retirement to get insured in your new situation.
Have You Made a Will and Lived Trust? These are essential documents that will protect your family in case something happens to you. They also give you peace of mind that in the worst-case scenario, there will still be a plan for yourself and your family.
Have You Taken Everything Else Into Consideration? There are other things that may drag on if you retire early, such as investing time into your children's lives or making sure loved ones have sufficient care during any transitional period. It's important to make sure these things are in order so you can spend your retirement more actively and positively.
How Much Time Should You Plan on Working? One of the biggest concerns that arise for people who retire early is potential boredom. Even those who leave their jobs for a more suitable lifestyle find themselves without purpose for the first time in their lives. They've suddenly retired, but have no idea what to do with the rest of their life. For this reason, I recommend taking at least five years (or longer) to transition back into the working world if you had a fulfilling career before retiring. If you can't wait that long, then be prepared to make new friends, create new hobbies and explore new interests. Maybe you'll even get a kick out of doing something completely different for 30 or 40 years! Anything is more enjoyable than just being at home alone.
How to Make a Successful Transition
The best way to make your transition back into the working world a success is to understand what you're getting yourself into. This means knowing your strengths and weaknesses, how the job market has changed over the past few years, what you can expect in terms of benefits, and how well you can fit in at your new job. By doing this, you'll have an idea of what transitions you need to make and when to make them. With this knowledge in hand, you'll be more prepared for a successful transition that gives you the chance for personal growth. I also recommend that you take some time before officially retiring so that you can make sure all necessary tasks are completed. This is important so that you can focus on yourself and your personal growth with less distractions. Once you've satisfied the requirements, then it's time to go through a job search.
Job Searching After Retirement
When searching for a new job, there are several things to keep in mind. One of the most important is how much experience you have and what skills you bring to the table that are different from your current position. For example, in my previous role as a counselor I had experience working directly with people and helping them find solutions to their problems. I also knew how they functioned in various life areas and was able to relate this information when working on an individual basis. Although both of these skills could be useful in any new job, I had more experience that many others in my position. Therefore, I had a head start on other counselors and was able to get the job I wanted much easier.
Once you've completed your job search and found what you're looking for, then it's time to look at salary comparables. Start by searching websites such as Indeed or Simply Hired , which will provide you with a list of jobs and salaries within a certain geographic location. I also recommend using Glassdoor , which is another online database where you can go through a variety of different companies and find out what the employees think about salary negotiations, benefits offered and more (the link for this website is below).
Conclusion
There are many different ways to approach retirement, but I think it's best when done within your own terms. There's no need to follow someone else's plan or try to live their life just because it looks good on paper. If you feel the time is right for you, then go for it. No one can tell you when the right time is; only you know what's best for your situation and situation changes over time, so there may be some adjustments needed along the way. Just make sure you have a plan in place and that other people are aware of your intentions, especially if they depend on your support (i.e., children).