There are plenty of big and scary stages to our lives. From growing up and passing tests at school, to going on our first date. Then, of course, our first job, our first promotion, our marriage and then the firstborn.
Life is full of big, scary and unknown stages and it could be retirement that is the scariest of them all. Retirement is a bit scarier because there’s simply not a great deal of solid information – there isn’t even a mandatory retirement age in most countries, so retiring before the age of 60 could be considered an early retirement.
There’s another reason why retirement is scary, and that’s because it involves money and financial security. While it certainly isn’t hard at all to save, there are situations that simply take our money away from us – debt, school, taxes, kids. You know.
If you happen to be reading this article in your 20’s or 30’s, good! Start putting away 10% or 5% of your annual earnings away for the future. The later you start, the harder it will be and if you’re approaching your 40’s, you might need to save over half of your annual income to be secure in retirement. Of course, there are pension schemes, 401k plans and the like that can force you to save while you work. Pensions that you invest in can be taken out as a big lump sum, or incremental payments – again, make the choice that is the best for your and the choice that will work for you.
There are two massive decisions to make upon retirement. In some instances, many would look to sell their property and move into a retirement home which provides care. Another big decision is choosing when you are going to retire. Consult with a retirement planner before you approach these decisions and make the choice that is the most financially stable for you. If you’ve paid your mortgage off, you might want to stay home – but that sale could bankroll your retirement plans! It’s up to you.
Even if you are at a point where you are considering retirement – this is your choice to make. No employer can force you to leave a role because of your age, and if you apply for new roles, you don’t have to disclose your age. This is discrimination. You stop working when you, and you only, want to stop.
The biggest fear of all in retirement is the money. How long will our money last and will we outlive our funds? It can be scary, and truly no-one is going to know the answer as we don’t have clairvoyants that can predict that. If you can predict the worst case scenario and consult with accountants on an amount you’d need, you can have a clear savings goal in mind and if needs be, ramp up your savings towards your retirement.
Saving is a rough deal for us sometimes, but financial security is the best thing we could ask for in retirement, and it’s up to you and you only to assess this and your needs and decide what is best for you.