By Evan Vitale
At some point in our lives we all start to think about retirement. What will it be like? Where will we live? Can I afford to retire? And, more important, when can I retire?
For many, it’s difficult to think about the financial implications of retirement.
If you were going to retire today, what sources of income would you have instead of your regular employment paycheck? Retirement means the paycheck that you’ve grown to count on every week (or bi-weekly, monthly, etc.) is now gone. Can that income be easily replaced?
Are you old enough to qualify for Social Security benefits? If not, can you live week to week and month to month without receiving those benefits until you’re old enough to qualify?
Will you be receiving a pension from your many years of service at your place of employment? Have you been saving extra money for your retirement? Do you have a 401(k) play, Roth or taxable investment accounts that will provide revenue for you?
Let’s say you have “some” income from benefits and pension, but not enough to replace your regular income. If so, do you have other revenue sources to make up the difference?
Tough questions? Yes, but these are the questions you need to be asking yourself – and you should be able to answer them honestly – before you start thinking about a retirement date.
One thing is certain: you do not want to retire too early and discover that you don’t have enough revenue, benefits, pension, etc., in order to make ends meet. Some, however, take the retirement leap too early, but they have planned for another income solution (part-time employment, etc.) to help make ends meet.
Now (not later) is a good time to see how things currently stand with your financial and retirement goals as it’s much easier to plan for a comfortable and enjoyable retirement when you’re ready that have to struggle and continue working in your golden years.