The COVID-19 pandemic is forcing older workers to examine their job options. In an article on CNN.com, an economist mentions that young workers’ participation in the labor force has almost fully recovered, while older workers and women are recovering more slowly. I’m sure this has prompted individuals to say to themselves, “Am I ready for retirement?”.
Making the decision to retire involves more than simply deciding not to work anymore. It includes financial planning (Do I have enough money?), healthcare planning (Can I take care of my medical needs?), and emotional planning (Am I emotionally ready?). Over the past year, we’ve written about some of these topics and we thought it might be helpful to have them as a reference in one place.
It’s very easy to simply pick the government’s age for collecting Social Security as your retirement date. But if I had a dollar for every person who turned 62 or 65 and said, “I’m not ready yet.” I would be retired right now. LOL! No one is holding you to that date. It’s simply a placeholder for planning. And retirement planning is important.
Happiness means knowing what will make us happy. In our retirement life, we will often have to deal with trade-offs. For example, we can travel often but our accommodations might be economy. Versus traveling less but more luxuriously. Or we can retire earlier but it means downsizing and paying off a mortgage. Or we can work longer, but it means becoming a freelancer or contractor without corporate healthcare insurance. For us to make good decisions, we need to truly understand what makes us happy.
Statistically, we know that people are living longer. The challenge is that we’re not financially preparing to live longer. The financial shortfall between how much we need for retirement and how much we have has been labeled “the retirement gap”. The retirement gap is a global retirement planning issue and it’s growing, especially in the United States. The bottom-line is that individuals need to prepare for retirement because Social Security wasn’t designed to cover 100% of our retirement expenses.
In today’s business world, we appear to be much more accepting of failure than ever. Billionaires like Sir Richard Branson and Spanx founder Sara Blakely remind us that it’s okay to make mistakes. But I can see how people could feel different about flunking at 20 than flunking at 60. We have to view our unretirement and retirement as a journey. A journey that starts early in life. Will there be stumbling blocks and changes along the way? Absolutely. But that doesn’t mean we’ve flunked life or our retirement. It does mean that we need to find ways to adjust.
One of the things to consider in retirement planning is transportation as in, “How much do you want to drive?” The answer might prompt you to take some action like moving from the suburbs to a more walkable community. Or maybe downsize vehicles to something smaller and/or more fuel efficient. Or you might do what we did and simply become a one-car household.
As a person who likes to plan, I make lists. Granted, all of my lists aren’t created equal. For example, I plan our meals using lists. It helps us save money on groceries and we don’t waste food. I also have a list of small tasks that I need to complete during the day like “buy tickets to see Bohemian Rhapsody on Friday”. I can’t imagine when I retire that I would stop making those types of lists.
Regardless of where you are in your retirement planning process, making sure to think about all of the aspects involved in retirement is important. I’d like to think that anyone considering retirement wants to know they’re as ready as they can possibly be for the future.