When people think of retirement, the main concern centers around money – will I have enough to enjoy life for 30 or more years? Contributing more money as you age or rebalancing your portfolio to provide a reduced risk exposure may be your top concerns. But what happens on that fateful day when you leave the office for the last time?
Actually, what happens a month or two after you leave the office? Some people quickly lose the high of not having to work and enter into a lull where they don’t know what to do. Will you end up bored or start to regret your decision?
If you’re nearing retirement, consider taking a test drive before you give up the life you’ve lived for 40 years.
Live on your retirement budget
As I mentioned, a prime candidate for sleepless nights when you retire is money. Whether you will have enough to last is based on many factors. Some of them are under your control, while others aren’t. Who would have predicted a pandemic for 2020?
One way to overcome your fears is to practice living on the reduced retirement budget you’ve set for yourself before you retire. Pick a month or two at least half a year before you retire, live as normally as possible, but see if you can make ends meet using your retirement budget. Try to pick a “typical” month, one where you’re not eating out more often or where you need to buy extra groceries for the holidays.
This will do two things. One is it should help you determine how realistic your budget is for the long-term. If you’re getting uncomfortable within six weeks, you probably won’t be able to keep it going for years and years. But the other advantage is if you can start living on your retirement budget now, you can sock away a little more money (or just fatten up the cash account) before you retire.
Try different second acts before going all in
I want to drive around the country in my new RV. I’ve always loved horses and want to spend my later years running a horse farm. I collect antiques and want to open a little shop. These are just some of the second-act dreams you may have. But before buying that RV, make sure you like being in an RV. Rent one and go on a two-week trip. Do you like being behind the wheel of something that big when dealing with city traffic? Is there enough space for you and your co-habitant?
If you’re considering a new business venture, work part-time for a similar type of store at nights and on weekends. Do they have enough customers? Are the owners concerned with business trends? Or if you’re set on continuing your working career as a freelancer, take on a few clients while you’re still on the job. How do you like chasing down invoices? Are you motivated enough to work from a home office?
If you’re considering a new locale, rent there for a few months
If you’re thinking about moving elsewhere in your state or across the country, try it first. If the new locale is close by, consider spending weekends there. Read the local newspaper online. Visit realtor websites and compare homes in the area to learn what’s available in different price ranges.
If it’s across the country, rent a house for at least several months (preferably more to get a feel for the seasons) to see if you really like living there. Are you meeting people? Do you miss home? Even if you sell your house, don’t buy another house immediately. A lot of northerners became halfbacks – people who retired to Florida, didn’t like it, and ended up in North Carolina or Tennessee.
Health insurance – if you’re too young for Medicare, what is your plan to bridge the gap?
Early retirement. Living beachfront when you’re young enough to still run on the beach. Hiking in the mountains when the weekend visitors are all working. These are worthwhile dreams.
But in the US, there’s often an impediment to this dream: health care. Many people want to retire early but receive health insurance through their workplace, and Medicare isn’t available until you’re 65.
There are alternatives – if you leave your job, you are guaranteed COBRA for a limited amount of time. If you’ve never seen COBRA premiums, sit down first. You’ll be shocked at how high they are.
Additionally, there’s the Affordable Care Act, sometimes called Obamacare. While these premiums may be more in line with what you’re paying now, you have to make sure the coverage provides everything you need and also access to doctors you want.
It’s not impossible to retire early. Just make sure you don’t forget about health insurance.
What if you and your partner aren’t retiring at the same time?
When you read retirement planning articles, you rarely see them mention an age gap between couples. How do you work retirement when one person is 63 and the other 53?
There’s no right or wrong here. Actually, let me rephrase that. There’s no perfect way to do this, but the right way is to talk openly about your goals and dreams. Figure out a plan to get you both where you need to be. For the person wanting to retire, maybe they work part-time until they’re 65 and Medicare kicks in. For the younger person not ready to hang it all up, maybe they can find a job that lets them participate in travel with their partner or be willing to move to the mountain community the other always dreamed of. The key here is putting your wants and needs on the table and being open to listening to your partner’s wants and needs too.
Talk to others who have recently retired
No matter how many of these articles you read, talking to recent retirees will present another side of the story that you should hear. If some of your friends have already retired, you’ve probably been hearing about their experiences – both positive and negative – for some time. If you’re the elder statesman, see if your friends have older siblings who have retired and would be willing to talk with you about what they’ve discovered. I would imagine for a cup of coffee you’ll learn tons.
Be honest with yourself
This is too important to tell yourself that “it’ll be different once I retire”. If what you’ve dreamed of doing doesn’t make you happy after you’ve given it a fair chance, don’t keep thinking it will just because it was your dream. Maybe living 50 miles from civilization sounded great when you were in a city of 10 million, but now you’d like to see more than your partner every day. Be honest with yourself. If you’re not sleeping, if your stomach hurts, it might be time to try plan B.
Retirement will be a process. You’re just entering the first stage with the test drive. You may get two weeks into your experiment and start thinking what the heck am I doing? It doesn’t mean you can’t have a happy retirement. But it does give you areas to research – maybe you should try working part time, perhaps you need to volunteer 20 hours a week. Keep trying different things. You put in the hours at work, sat through the meetings, and saved enough to reach this point. You deserve a happy retirement.
Photo by Andrea Piacquadio