Upon retirement, most people would normally find themselves at a loss as all the pressure and stress caused by routine work obligations suddenly disappear without a trace. No more business e-mails to answer, no more meetings with bosses, and no deadlines to meet. Monthly operational targets become irrelevant. All of a sudden, you have a lot of free time to kill. Some retirees find this abrupt disengagement from the business community difficult to adapt. It is therefore advisable for intending retirees to make adequate preparations before the retirement D-day comes along. This article highlights the top ten most important considerations upon retirement.
1. Formulate clear retirement goals:
Retirement starts another important phase of your life, which could last for years. Similar to setting your own career goals after graduating from university, you should set out a plan with objectives for your retirement life, highlighting what you would like to achieve and considering factors like your desired lifestyle, travel plans, hobbies, and any other activities you wish to pursue.
2. Take stock of your financial affairs:
You should draw up a complete list of your assets and liabilities. Regarding your assets, they should be diversified in relatively low-risk investment products such as bank deposits, government bonds etc, which could generate a reliable recurring income stream. As for liabilities, they should be repaid and/or reduced as soon as possible. The ideal position is to be in a zero-debt position. In any event, retirees should not increase lability as a fundamental principle. In particular, high-risk, speculative investment products with alluring high non-guaranteed returns should be avoided at all times. Upon retirement, your investment risk profile needs to be adjusted to reflect your loss of regular salary income.
3. Manage your regular cashflows:
A monthly income and expenditure summary should be compiled, setting out details of income received and expenses incurred during the month. Ideally, a surplus of income over expenditure should be targeted. It is also highly recommendable to do a cashflow projection, setting out estimates of your future expenses by considering factors such as housing, healthcare, daily living costs, and leisure activities; and matching income such as rent, interest or dividend from your stock investments. It is essential to have a realistic understanding of your financial needs during retirement. Sometimes, consulting a professional financial advisor is helpful to get a comprehensive understanding of your financial situation.
4. Maintain an adequate healthcare coverage
The biggest potential outgoing after retirement is definitely healthcare costs. Taking out a suitable cover, preferably before retirement, is strongly recommended. You should seek advice from professional advisers as to what healthcare policy is most relevant by reference to your financial and health status.
5. Establish a contingency fund
Upon retirement, you should put aside a certain amount of money as contingency fund, in order to cover financial needs in the event of unexpected contingencies. Having such a buffer fund would help keep your mind at ease at all times.
6. Engage in a new venture or pursue a hobby (incl. charity)
Retirement provides an opportunity to explore new interests, passions, and goals. You should take the time to reflect on what gives you a sense of purpose and fulfilment. Consider activities, hobbies, or even part-time work that aligns with your interests and values. Alternatively, you may invite your friends to jointly pursue the aligned interests.
7. Maintain social connections
Work often provides a significant portion of our social interactions. As you transition into retirement, you should make a conscious effort to maintain and strengthen social connections, by staying connected with friends, family, and former colleagues, and joining clubs, volunteer organizations, or community groups that align with your interests.
8. Be Mental Readiness
Retirement often marks a significant transition from a structured work routine to a more open-ended phase. It is essential to mentally prepare yourself for this change by acknowledging and accepting the shift in your daily life and identity. It is important to cultivate a positive mindset and approach retirement with optimism, embracing the opportunities that retirement brings, such as more time for personal growth, self-care, and building deeper relationships.
However, retirement can sometimes bring about mixed emotions, including feelings of loss, boredom, or uncertainty. If you find yourself struggling with the transition or experiencing emotional challenges, it is wise to seek support from friends, family, or professional counselors who can provide guidance and help you navigate this new phase of life.
9. Stay mentally and physically active
Engaging in mentally stimulating activities, such as reading, puzzles, or learning new skills help keep your mind sharp and ward off cognitive decline. Additionally, you should perform regular physical exercise to maintain good health and overall well-being.
10. Continuously review and adjust your plan
Retirement may not always go exactly as planned. You should regularly monitor and reassess your retirement plan as your circumstances change. Life events, market conditions, and personal goals may require adjustments to your savings and investment strategies. These adjustments are necessary to ensure you are always in control over your investment goals. Therefore, one should be prepared to adapt to changing circumstances and adjust your expectations. Embracing flexibility can also help you navigate any unforeseen challenges and enjoy the journey.
In conclusion, retirees should take the time to celebrate and acknowledge the milestones and achievements throughout your retirement. Whether it’s reaching a personal goal, embarking on a new adventure, or simply enjoying the freedom retirement brings, you should always celebrate and savour these moments.
Written by: CHARM-Retirement.com
Mar-2024
