Financial advisors say one of the most frequently asked questions from their clients is “Am I financially prepared for retirement?”
But far fewer people take the time to think about another, equally urgent question: “I am emotionally ready to retire? “
Leaving full-time workers certainly has serious financial implications. However, experts say that economic problems too often overshadow important emotional considerations. As you plan your “golden years,” take the time to improve your I.Q. retirement. Among other things, make sure you have a healthy sized nest egg.
Your retirement E.Q.
Don’t forget to increase your retirement age before you retire. (Emotional quotient) also. Now, before you leave Corporate America or your current job to retire, consider these three questions.
1. Where do you intend to live?
Clearly, if you still have a mortgage or are planning to buy another home, this is a financial problem – especially since house prices vary widely across the country. But where you live in retirement is also an emotionally charged issue, especially for couples.
Often times, a partner can envision selling the house, moving out of the state, and / or moving to a warm climate. In the meantime, the other partner may be sentimentally attached to the family home, may be cautious about leaving the current neighborhood, or far from wanting tropical weather, moving closer to grandchildren in Minneapolis or Buffalo. Talking to your spouse beforehand about these potential areas of disagreement can go a long way in preventing future conflicts.
You don’t want to tarnish your retirement together by becoming bitter about something as basic as the place you both live. So address this problem early on.
2. How are you going to spend your time?
To find out what to do with the rest of your life, you need to seriously look for the soul. It’s also important to debunk some myths about what retirement means. Many people fear what their life will be like because they associate retirement with decreased performance, decreased social benefit, addiction, or even a step closer to death.
As a result, many people just stop working and then ask, “OK, now what?”
Instead of taking this approach, spend some time now (well before retirement) exploring the breadth of your life – including your accomplishments, interests, and things that you have yet to accomplish. This requires that you identify unfulfilled dreams or goals, examine the hobbies and activities that excite you the most, and identify what you are passionate about in relation to intellectual, physical, social, or spiritual activities.
Realizing what you are doing is also important Not want to do. Although some people might want to retire to a beach and sit around and play cards all day, others would be bored to tears with this lifestyle. There is obviously no single best path for everyone. So, be honest with yourself (and your partner if you’re married) about what speaks to you most and least.
3. If your finances are below expectations, can you cope with this reality?
Many of us grew up with grandiose images of what retirement will look like: freedom from the stress of work, time to travel, carefree days playing golf or doing nothing at all. Unfortunately, these images are often more fiction than fact.
The average American is completely unprepared for the financial challenges of life without a steady paycheck, and therefore unprepared for the emotional disappointment that inevitably occurs when retirement dreams and goals are not realized.
A big shock to many people is that they are unlikely to retire at all – at least not as quickly or as they hoped. Financial considerations are forcing many more retirees to continue working part-time. others are forced to adopt a much more affordable lifestyle.
All of this is not to mention the fluctuations in the stock market that can destroy the pension funds on a 401 (k) plan or other funds held in investment accounts. All in all, managing finances, including debt, wisely is more important than ever, especially as you near retirement.
Retirees and Debt
Unfortunately, more and more retirees are getting into debt at precisely the point in their lives when they should be free from financial worries. While older people have repaid their mortgages in previous generations, today almost half of all seniors still owe a house note.
In addition, people 60 and older are the fastest growing segment of the US population with student loan debt, reports the Federal Reserve. Equally ominous is that Americans 65 and older have an average of $ 9,300 in credit card debt, more than any other age group, according to Demos, a New York-based think tank.
Part of this rising debt is due to rising housing, healthcare, and energy costs. However, if you carefully examine the three questions above and get your debt under control now, you can avoid a late retirement scenario – and immerse yourself in your “golden years” with greater personal happiness and maximum financial freedom.
Lynnette Khalfani-Cox is a personal financial expert and co-founder of the free financial advisory site Askthemoneycoach.com. Follow Lynnette on Twitter @themoneycoach and on Google Plus.