We have found that people sometimes struggle to put a date on retirement.  The idea of no longer having a stable income can be scary.  Trusting a lifetime worth of savings to provide for them is emotionally challenging.  People become hyper-aware of how much has been saved and wonder how to know when it will be apparent they've won the retirement game.

Consider a few questions.

Have I defined what I want my retirement to look like?

You will want to have fleshed out a few of the details.  What will you be doing?  Where will you be living?  Have you considered the emotional side to retirement as well as the numerical?  Being in touch with what you truly want is the first step to living a fulfilling next season.

Have I considered my debts, and will they be paid off, or will they remain?

Targeting debt payoffs in relationship to your stop working date is vital.  You'll want to know which debts might remain with you so that your cash flow planning can include them.  Your Advisor will want to make sure that you are not continuing to accrue debt; this could be disastrous for your plan.  But, it can also determine when you will feel confident about retiring.

Have I set aside emergency savings and large purchases?

The savings you dedicate to creating income for your retirement income plan should avoid large unplanned withdrawals.  Thus, setting aside six months or more for emergency savings is a must.  This money will not earn much interest, but the benefits are beyond interest.  If you can avoid interrupting your plan, then that's a significant benefit.

The same goes for large purchases that you know you'll have.  For example, if you know, you will remodel the kitchen, put in new hardwood floors, take an extra-large celebratory vacation, then set that money aside.  Do not include it in your retirement income plan.

Do I have a social plan?

Leaving behind a career can create a large void.  We've written about this before.  Take advantage of the months and years before you retire to create a social framework to welcome you into retirement.  Please take a look at our article about how not to lose your identity in retirement.

Do I have a retirement income plan?

It seems crazy to think of taking a trip without a plan.  Most people wouldn't attempt it.  But many people take that trip down the retirement income road without a clear withdrawal plan.  Vacations feel better when they planned for the expenses rather than placing them on the credit card!  You'll enjoy them more.

Your essential needs, along with your desires, need to be measured and crafted into a plan you can feel good about.  Our approach using our Money Master Plan ™ considers both of these things and can show you what would happen if you took that extra trip next year instead of waiting five years from now.

If you want to create a retirement income plan, talk to an advisor.

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