Should you retire?
There are many reasons to stay at work. Maybe you have an emotional bond with your office chair or maybe you think your job is too important to leave behind.
The truth is that there are many reasons to leave a job and many others not to leave. For most people, a career spanning 30 years is sufficient. But is early retirement realistic for you? Let’s take a look at a few things.
When you’re 50, the government says you’ll live another 33 years (that’s from the Social Security actuarial tables). That 33-year retirement may be longer than your entire working career.
Life expectancy is increasing by leaps and bounds with advances in medicine and technology and you may want to think in terms of a 40-year retirement. Maybe you should ask another question. Should you retire first?
Rising costs and political uncertainty are leaving many people wondering about the future. This alone makes it extremely important to figure out how to finance a successful retirement and how to make the most of what we have.
How much will retirement cost?
Besides travel, golf, fishing and macramé classes, what else would you like to have on your agenda? How much will your retirement cost? Will you have enough income to do it all? If you are still saving for retirement, how much more do you have to come out of each paycheck to raise that much money? Good question! Let’s get the answer!
One thing I didn’t think about was inflation and how much things will cost in 15 or 20 years. After all, if you look 20 years into the future, you can bet that the $ 50K that seems like a good yearly income now will certainly have to be bigger to buy the same things as it does today. Inflation can have an impact on the reach of your money.
But what will inflation be over the years? Any number you can think of is probably good enough to get you through the first year of retirement. We can guess what inflation will be and estimate what impact it will have for the next 40 years.
Where to retire?
Where will you live? Hopefully, the mortgage will be canceled, so all you have to worry about with the home is property taxes and maintenance. Maybe you can sell and downsize to a smaller spot in warmer weather. It sure beats shoveling snow in your 70s, even if it’s further away from family and friends. Also, you don’t see the children much anymore and they can always come to visit.
You should probably think about insurance too. You are probably insured under group policies through work for disability, life and health coverage at this time. In fact, your employer will likely pay some or even all of the premium for that wonderful insurance.
If you retire, you could lose that insurance coverage. So what happens to your spouse and family if you are inconsiderate enough to die at a young age? How will you pay for a serious illness or hospitalization and all your attending physician bills if (God forbid) you become permanently disabled?
You can probably forget about getting help from the government. You are too young for Social Security or Medicare to ask for it. And even if you qualify, is it possible that government assistance is not enough for a survivor and all the medical bills? If that’s the case, what are your alternatives? What about long-term care costs if you need it?
About now you’re probably thinking, “Hmmm, maybe I should have a few more kids to help support me in my old age.” Don’t worry, you don’t need any more children. But you may not be able to quit your job. I’m just kidding about that. I’m sure you can retire at any age without having to increase your population or remain chained to a desk.
