A question that all working people ask themselves (possibly many times a year!) is when can I retire? The answer is never simple, especially if you are a business owner or director and know that your departure will have repercussions beyond your individual freedom. Obviously, there are scenarios for some people where retirement is thrust upon them overnight, primarily through health or employment changes but for the majority, it can be seen on the horizon, something we edge towards each day.
How do you know it’s time to take the plunge?
There have been so many studies on how, when, and why people should retire, but one thing is common in every report, and that is retirement doesn’t guarantee happiness. 28% of recent retirees polled by Nationwide Retirement Institute said that life was worse in retirement than it was when they were working. It’s one of several surveys to find that, for roughly a quarter of retirees, life after work can result in isolation and a loss of direction.
Am I financially ready?
The obvious thing to check is financially can you afford it? This shouldn’t be a simple ‘yes I spend X each year, so need Y’; instead treat it like the budget for your company and test different scenarios! Life never goes to the original plan, so why should your retirement. This year is a great example, with high inflation, creeping interest rates, and volatile stock markets. In addition, I can tell you from experience, your spending habits change when you retire… significantly!
Once you think you have the answers, go get it all independently checked, it could be the best few thousand pounds you ever spend and gives that extra reassurance. No one ever wants to go back to work because they’ve run out of money.
Will I be happy?
So, the first box is ticked, you can afford it, so what next? Surveys suggest happy retirees have many things in common, but for me the big ones are:
Work hard at staying healthy
Have strong social connections
Find a clear sense of purpose
Never stop learning
In terms of my own retirement my principal reasons were to restore balance, explore other interests, and give a little back.
What will I do with my time?
The alarm clock rings, you immediately turn it off, roll over with a smile on your face; this is the day you’ve been waiting for… retirement has arrived. But what now?
My retirement planning started with a ‘to do’ list, essentially everything I wanted to do in life, but had never got round to. It had all the normal things like more travel, plus a few specifics like a British Lions tour in New Zealand (who wouldn’t!).
From that initial list, the ideas evolved, so that six months ahead of retirement I had a plan and was genuinely looking forward to the big day. I felt I had struck the balance between giving myself more time and space, but equally still having a real purpose, structure, and interest.
I decided to set up a small investment company and join the board of a charity as the two foundation stones on how I’d spend my time, and then on top of this do ad hoc consulting, mentoring, and blogging, with hours to suit. I love the fact I’m still learning, giving back, managing my investments, and still have time for all the nice things in life I’ve been looking forward to for so long.
There’s an old phrase that says the definition of happiness is ‘something to do, someone to love, and something to look forward to’… it’s worth keeping that in mind.