To Retire or Not to Retire- That Is the Question
You have done the work. You have saved and invested your whole life. You actually have a plan in place. You are one year out from retirement. The numbers say you can do it. What could be wrong with that scenario? You don't know if you can retire or not. You don't know if you can pull the trigger on the most important decision of your financial life.
You feel alone in this scenario. Why do I feel this way, you ask.
Well, the good news is that it is a common fear and common scenario. Retirement should be a no-brainer if you can do it. Right? Well, you have to consider some of the factors that figure into your situation and options to combat them
You Are About to Make a Major Emotional Shift
What if you pull the trigger and you are wrong? What if you find out you should have waited? The reality is that in most cases, once you pull the trigger you can't go back if you were wrong. What are you going to do with your time? What is your purpose? How will you and your spouse adapt to retirement together? That is a fair question. You would like to think no problem. However, it is an unknown.
Well here are some tips that might help!
(1) Have a Purposeful Game Plan
Know ahead of time what this new chapter of your life looks like. Know ahead of time what your new purpose in life will be. Know how you will spend your time. Create a game plan that is exciting and purposeful that revolves around your new life with your spouse. Don't wait to create that emotional game plan after the fact. By doing so, you are creating emotional risk.
(2) Be Confident in Your Game Plan and the Numbers
If you don't have a financial game plan, you shouldn't be even considering retirement. You need the numbers to tell you if it is feasible. Without the numbers, you are playing a very risky game. So, assuming that you have a game plan, why the hesitancy? I find that it comes down to confidence in the game plan. If you are not 100% confident in the plan, it is tough to move forward with the plan. Maybe the assumptions seem too aggressive to you. Maybe you don't have confidence in the structure? Get with your advisor and get that confidence. If you can't achieve that, find another advisor and talk to many until you get that sense of peace and confidence.
(3) What If the Numbers Are Close but Not Quite There Yet?
In that scenario, it is difficult to have confidence to move forward. After all, your assumptions have to be more aggressive if the numbers are not there. There are a few things to consider if you are close but not there
This is a great transitional move in retirement. Work part-time for a period of time allowing the investments to grow and reducing the amount of money that you need to take out.
Delay Social security
Every year you delay social security, your benefit grows by 8%. It might make sense to redo your plan in a way that allows you to wait a few years. A roughly 16% increase in benefit can make a difference.
Base your decisions on the numbers. As Long as the assumptions are realistic, the numbers can be trusted. Make sure you have 100% confidence in the numbers and assumptions made in your plan. Finally, have an emotional game plan of purpose in place. With all of that, you can confidently move forward with the biggest decision in your financial life.
Bob Brooks, the host of the Prudent Money Radio Show, is also a financial advisor who specializes in game plans for retirement. If you need a game plan or unsure of your current one, email Bob at email@example.com or call and talk to Judy about a complimentary phone conference at 972-386-0384.