One shouldn’t work for money during their entire lifetime. As you make your daily ends meet with the help of your nine-to-five job and side hustles, you should find other ways to generate an income passively, especially as you become older every year.
Planning For Your Retirement: You Do You!
Unfortunately, your health and physical capabilities will decline, and you have to be more than prepared when it comes. Since old age doesn’t conventionally fit in working anymore, and you’ll have to enjoy your life at old age, retirement planning becomes necessary.
Planning for your retirement shouldn’t only involve financial readiness, although it’s of immense importance. The physical, emotional, and social aspects also come into play. Your retirement planning process and strategies don’t necessarily have to follow the standards, as long as it allows stable and secure living without extreme dependence on other people.
You don’t have to reach 60 years old to retire as you can make your own rules. However, retirement education is encouraged even for young people. You can start reading about retirement in reliable sources online and offline, like the Retirement Investments and sites like it, to get started.
As long as you’ve ticked off the indications in this list, your retirement is good to go:
Borrowing money isn’t bad, but not paying for it is. Having debts can’t be avoided, especially if you’ve faced life emergencies. Some people even have debts because of poor financial decisions. Regardless of the nature of your debts, it’s essential to pay them off completely for your benefit: financial freedom and peace of mind.
Before your retirement, you should already be debt-free, whether it’s your mortgage, medical debt, or credit card debt—there are no excuses. After all, eliminating all your debts isn’t just a critical part of retirement planning but one of the first steps to being financially free.
You’ve Saved Enough
Money is the biggest puzzle in retirement. How can you live comfortably at old age if you don’t have enough money for daily spending? You’re only a step closer to retirement if you have enough retirement savings.
No, retirement savings aren’t money that you keep stacking and hiding in your closet. Retirement saving options have become broader today. The best ones to choose for retirement savings are your Social Security, retirement plans offered by your current employer, and your own savings and investments.
The real question is, how much should you save for retirement? Most people measure it based on annual income, but the formula is pretty inconsistent and challenging. Instead, compute your yearly spending and multiply it by 25.
You’re living a Simple Life
A golden rule of life is to always live within your means. People are constantly exposed to financial and lifestyle temptations. These may encourage you to spend money on things that make you happy. As many would say—YOLO, or, ‘you only live once.’ At this rate, you’ll end up spending more than what you make.
Living a simple life on your retirement isn’t the same as the eat-sleep cycle, but it’s more of doing things that are most necessary and meaningful to your life. Finding happiness in learning and making memories, instead of material things, is one excellent representation.
Through living a more straightforward, distraction-free life, you’re getting closer to happiness that doesn’t rely on money and material things. You don’t only live once; you live every day and die only once.
You’re Confident in Dealing with Emergencies
Along with eliminating all your debt, building an emergency fund is another crucial step toward financial freedom. As you age, your risks and susceptibility to emergencies, particularly medical emergencies, increase. Before your retirement, you have to ensure that you’re fully equipped against any trouble.
The horrors of emergency expenses during your retirement are unknown. Whether they’re costly hospitalization bills, the passing of your spouse, or a market crash, your plans and back-up plans should be ready.
You’re Surrounded by a Supportive Network
As mentioned earlier, the emotional and mental facets of retirement are as valuable as the financial aspect. Loss of relationships is inevitable in your retirement, like relationships with your colleagues, but there’s an entirely different support system that awaits people in their retirement. These people include your partner, relatives, peers, and new relationships bound to form.
If you’ve developed good relationships with people in your network and support your retirement, it’s a positive indication that retirement is worth considering. Most importantly, assess your emotional and mental preparedness and ask yourself, ‘Am I emotionally and mentally ready for another chapter?’
Many individuals dread their retirement, but it’s something you should be excited about as you’re approaching a change in your lifestyle. However, if you haven’t planned your retirement and prioritized your savings, retirement is indeed alarming.
It’s not too late, though. If you haven’t taken the right steps, today’s a good a day as any. Start building that nest egg, and you’ll be fine in no time.
Danis Woods in Businessman, investment banker and stock exchange traders. On the same time he loves writing financial blogs to shed lights on different aspects that new and existing businessman are not aware of.