I’m currently 55 and as of July 1st, 2021, I retired from public education after a 28-year career. I had decided to retire early because I had a desire to create educational resources for teachers of English Learners and children speaking Haitian Creole. This article will take you through the considerations, preparation, and actions that allowed me to achieve this goal. My wife and I began planning for my retirement long before the time came. Preparation is key! Let’s begin by defining retirement.
What is Retirement?
Most people will imagine retirement to be a time when you can sleep as late as you want, do absolutely nothing all day, travel, and just simply enjoy life. While many of those things can be true, you need to consider your particular situation and your current responsibilities to get a clearer and more accurate picture. Retirement, in simple terms, is when someone chooses to stop working and live off of the income and/or resources they have acquired. The age at which you retire can make a big difference in your planning process. In many industries, you can retire at 55 or 59 ½ . You can even retire earlier than that if you have a lot of resources and a good plan.
Retirement isn’t always what we think. For instance, I have an autistic son who is now 20 years old. He will graduate from school once he reaches 21. This means that for the past year, although I don’t have to get up for work, I have to get up at 5:45am each weekday to prepare his breakfast and lunch as well as get him ready for the bus pickup. My wife is happy because she now gets to sleep. Don’t get me wrong, I love being retired. I have the option of going back to bed once I put him on the bus.
Retirement can also be leaving an industry or job that you did to support your daily lifestyle and replacing it with an income-producing activity or hobby that you enjoy and that brings value to others. I always knew that when I retired from teaching, I would do part-time consulting and resource development. These are activities that I had done for years, on a very limited basis, but wanted to expand.
Considerations Before Retirement
The biggest consideration for retirement is, of course, your income and expenses. For anyone thinking about retirement, it becomes imperative that you begin to plan well ahead of time.
The key is to get to a point where your monthly expenses will be completely covered by your monthly income.
I would do the following, if possible:
- Pay off any past credit card debt and manage future credit debt so that it can be completely paid off each month
- Pay off any car loans or at least, plan for the monthly payments in your budget
- Find ways to maximize the efficiency for your utilities (electricity, gas, water, etc.)
- Pay off any old debt (student loans, etc.)
- Pay off your mortgage as quickly as possible
Set aside an emergency fund that consists of about 6-9 months of monthly expenses (This is separate from any regular savings or investments)
Retirement Checklist: 18 Things to Do Before You Retire | Extra Space Storage
The key is to get to a point where your monthly expenses will be completely covered by your monthly income.
I would do the following, if possible:
- Pay off any past credit card debt and manage future credit debt so that it can be completely paid off each month
- Pay off any car loans or at least, plan for the monthly payments in your budget
- Find ways to maximize the efficiency for your utilities (electricity, gas, water, etc.)
- Pay off any old debt (student loans, etc.)
- Pay off your mortgage as quickly as possible
Set aside an emergency fund that consists of about 6-9 months of monthly expenses (This is separate from any regular savings or investments)
Retirement Checklist: 18 Things to Do Before You Retire | Extra Space Storage
What Do You Want Retirement to Look Like?
Have a clear picture of what you would like your life to look like after retirement. Do you want to simply relax? Do you want to pursue a hobby or volunteer in your community? Do you want to work part-time? These are all things to consider when planning for your retirement.
According to research done on retired individuals, one of the biggest regrets that some retirees have is not that they run out of money but that, after 1 to 2 years being retired, they begin to feel isolated, lose their sense of purpose, and begin to experience boredom. While you might think that this could never be you, it is definitely something you need to consider. Are you an individual who takes pride in your work and enjoy the positive feedback you may get from your colleagues? Are you well-respected in your work circle? Do you find purpose in the work that you do? Do you feel like the work that you do helps to make someone else’s life a little better? If you identify with any of those situations, have a plan to stay connected to your social circle after retirement.
If you envision traveling, eating out, and buying a little beach house, make sure that these expenses have been planned for well ahead of time. You might even consider getting a part-time job and using the income strictly for recreational purposes. These are things you should do while in retirement.
- Stay active
- Find a hobby
- Save monthly for outings and vacations
- Practice healthy eating habits
- Stay connected to friends and family
- Become active in local organizations
- Use your time wisely
- Engage your brain
- Learn a new skill
Top 5 Regrets People Have About Retirement – Senior Healthcare Team Insurance
The Downsides of Retirement That Nobody Talks About (msn.com)
How much do you need to retire?
This depends on where your retirement income is coming from. If your monthly income will come from a lifetime pension, then you need to make sure that your monthly expenses don’t exceed your monthly income.
Any extra purchases will have to be planned for ahead of time and paid for in cash either through savings or the income from a part-time job. A pension is more straight forward because you don’t have to worry about running out of money. Unless the company or governmental entity goes bankrupt, you should be ok as long as you live within your monthly income.
If, on the other hand, you’re relying on your savings, 401K, or other investment accounts, you must act and plan differently. I would definitely make sure that you have guidance from a certified and well-qualified financial adviser in this situation. Here are some things to consider.
- Plan to live until you’re 100
- Look into an annuity account
- Plan for emergency expenses as you age
- Plan for inflation and possible downturns in the stock market
The following is an example for financial planning.
Monthly Expenses (mortgage, utilities, food, etc.) ……….… $4,500.00
Monthly outings(dinner/movies)……….……….…………………… $ 500.00
Yearly Vacation ………………………….…………………………………… $4,000.00
Unexpected monthly expenses …………………………..….……… $1,000.00
In the situation above, you will need to have an after-tax income of $76,000.00. Once your housing payments are completed, your required income will be lower.
Action: Take inventory of your current expenses (be exact)
Making it to retirement
Retirement can seem like an unachievable goal, especially if you’re just starting out on your journey. I never imagined that I would finally get there but here I am. I have many things that I would like to accomplish now that I have the time. Below are some tips to get you to retirement.
- Decide when you would like to retire
- Imagine the type of retirement you want
- Keep your job exciting by taking on new challenges
- Keep growing in knowledge
- Build lasting friendships and a strong support system
- Add value to your position
- Break your long term goals into smaller achievable chunks
- Celebrate the achievement of each of those goals
- Be disciplined and stay on track
- Take care of yourself along the way (stay healthy and active)
