Of course you need to consider the financial aspects of living in retirement. But thinking about when to retire also is important.
First there is being emotionally ready. For some folks, their work provides a sense of fulfillment. Their work is also the majority of their interactions and relationships with other people. Often those relationships begin to wane. It is good to have a plan to replace or add to those relationships after you retire.
One of our clients said, “I’m going to close the business and retire.” Then about a year later, he said, “I find retirement is no good for me. I’m going back into business. I miss the need to get up in the morning, a door to open, people to see, etc.”
Second, some retirees get bored in retirement. Twenty or 30 years of retired life is a long time to just relax. You might consider if you will be content just to relax and just do walking, yard work and maybe some recreational activities. Instead you might want to fill your days with new and exciting activities.
One client who retired said, “I used to really enjoy taking a day just to go fishing. Now I can go fishing every day and it is not as much fun as it used to be for me.”
If you are married, you know you should discuss what life will look like when both of you are retired. An open discussion with your spouse is important to do before taking that final step into retirement. You might talk about your vision for retirement and what your spouse thinks about it. Of course you want to keep talking about it and consider how it will impact the life of your spouse, now and in the future.
Some clients have found retirement to be a wonderful change and really have adjusted to retirement very well.
My father had found retirement was not very enjoyable. He would retire, get bored and “underfoot” and go to work in some different activity. Then he would retire again only to find it was not very great for him. So, he would go back to work in some other business. He found working was best for him.
If you are thinking of retiring before becoming eligible for Medicare (or government health insurance), please consider what extra costs might have to be paid for the medical insurance and expenses. Especially with the new laws on medical insurance (Obamacare), you don’t want to be surprised. Maybe you should look into long term care insurance or a life insurance policy that has a “rider” for some long term care benefits along with a life insurance benefit and the ability to withdraw the cash value?
Did you hear? “No man ever steps in the same river twice for it is not the same river and he is not the same man.” — Heraclitus.
John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs.