My husband is getting ready to retire in a little over 2 years and I am starting to freak out. Mainly because he will then be at home with me ALL THE TIME. Just kidding. I love having him around me 24/7 asking me what I am doing.
Anyway, besides the increased time we will be spending together, I must admit the decrease in income is a little worrisome. The last thing I want is to be worried about finances when he retires. That’s why we are taking steps to ensure we don’t get into a sticky situation.
Are you prepared for retirement? Have you looked at where you need to be frugal to make your dollars stretch? In order to feel comfortable in retirement, you do need to prepare.
Here are five steps you can take to ensure you won’t spend your retirement days struggling and stressed-out:
5 Steps To Get Ready To Retire
1. Be prepared for your income to drop
When you retire and stop receiving a paycheck, you might expect to experience a drop in income. If you’re not prepared for this possibility, you may find your spending and finances spiralling out of control. So you’ve got to be ready in advance.
A good place to start is by making a new budget. Sit down and take a look at exactly how much of an income drop you may be facing. Once you figure out how your income is going to change, prepare yourself by getting a budget together based on that “new normal.” You may discover the need to downsize some aspects of your life to accommodate these changes. Downsizing could include moving into a smaller home, getting a less-expensive vehicle, becoming a one-car household, taking fewer (or shorter) vacations, or planning ahead for home-cooked meals more frequently than ordering in or going to restaurants.
2. Seek out professional help
Retirement can be a huge financial transition, so don’t hesitate to seek out expert advice. Book a session with a financial adviser who specializes in retirement planning. He or she can help you take a realistic look at how much money you’ll need for a comfortable retirement and when you can comfortably take that step. A financial adviser can also help you figure out what your projected monthly income will be and to work out a budget.
A professional can also help you be sure you are getting all the benefits you’re entitled to. There may be all sorts of options available to you that will make retirement easier, from health care assistance to social security benefits. Your workplace may offer this kind of advising service, so check with your benefits department or HR person.
3. Balance your expectations with your reality
Yes, I would also like to spend my retirement traveling the world, but that can be a very expensive goal. If something big like traveling or living in a certain area is important to you, you’re going to have to work it into your new budget. Taking a realistic look at your retirement budget can sometimes reveal the need to adjust your expectations. Maybe you won’t be able to visit every continent, but perhaps you could allot a certain amount of savings each month toward a trip to the one place at the top of your list.
4. Talk to others who’ve done it
If you have friends who have already retired, don’t hesitate to pick their brains! Not only can people who have already “been there, done that” give you some insight on what works and what doesn’t, but they can often recommend retirement-savvy professionals (financial advisers, Realtors, etc.) they’ve had good experiences working with.
The people you’ll usually benefit most from talking to will be your peers and contemporaries – those who were making similar incomes in similar fields before retiring. If you’re still in touch with anyone who has recently retired from your own company, reach out and see if they have any words of wisdom to share.
5. Consider a side hustle
It’s never too late to start over! Now is the time to tap into those hobbies and skills that you never had time to indulge in when you had to head off to work every day. Or you can take this opportunity to throw yourself into learning a brand-new skill that’s always intrigued you but you’ve never tried.
If your projected retirement income needs a little boost, you can augment it by taking on odd jobs or starting your own small business. The possibilities are endless, but here are some ideas to get you started:
- Woodworking or refinishing furniture – If you enjoy building or refurbishing things, this could be a fun way to add to your income. Whether your skills are elaborate (such as crafting beautiful furniture) or more simple (such as building dog houses or chicken coops), there is always a need for sturdy and useful wooden items.
- Teaching music or art – This kind of teaching can be done in your home, your clients’ homes, or at your local house of worship, making it a fairly inexpensive enterprise. And sharing your passion with others will make you feel good, too!
- Repairing cars – This is a popular option for many retirees. There will always be a need for competent mechanics!
- Home repairs – If you know how to do small home repairs, plumbing, or electrical work, these jobs are also hot on the list of things people will always need. As a retiree, you will likely have the advantage of offering more flexible hours and cheaper prices than the big, established professional companies.
- Organizing events – If you enjoy party planning and working out the details, being an event or wedding planner could be a very fun side gig.
- Yard work or gardening – As long as you are able to do these jobs without too much physical strain, making yards look nice can be a much-appreciated job and a great opportunity for you to stay active and get some quality time outdoors.
- Sewing, knitting, and tailoring – You can make and sell all kinds of items – from traditional basics to the unique and unusual – on Etsy or at local craft fairs and festivals. If mending and hemming clothing is more your speed, a home-based tailoring service is another great option.
- Teach what you know – If you know the ins-and-outs of a particular skill (from cake decorating or crafting to gardening or photography) consider hosting a class or giving private lessons in it!
Planning ahead for a successful, happy, comfortable retirement is the best way to ensure you get to have one! If you haven’t already, define your financial goals. How much can you spend each month and how much do you want to save? How much money/what kind of estate do you want to leave for your family? Taking the time to answer those questions and to make the necessary preparations can help you ensure that your goals and expectations fit your retirement reality.