How can I start reading about retirement when I am just approaching the first or second decade of my career? How old are mine? Am I not supposed to start thinking of retirement only when you are fifty years and above?
The above questions would be answered by questions.
Do I know whether I would leave the work, or the work would leave me?
Do I know when? Am I aware of retrenchment, early or compulsory retirement?
These questions and many other uncertainties in our careers are the reason why the best time to start thinking and planning for our retirement is the first day we start working. It does not matter, your current age, you are working for yourself or for others. One day, you will leave the work, or the work will leave you.
So how do you start talking about retirement? How would you make sure it is a constructive and thorough discussion? Are you having the conversation with yourself or your spouse? If it is with your spouse, you both need to keep an open mind to support and respect each other’s opinions. One way to do this is to have a structured chat and follow the classic 5 “W”s – who, what, where, when, and why.
Here is how you can use the 5 “W”s to start your retirement conversation and avoid surprises the day after you leave work.
It is a good idea to start with “who.” As in, who will retire first? While you might have been thinking that you will both be retiring at the same time, this might not be practical for a few reasons. If one of you is older than the other, it might be better for that person to retire ahead of time. At the same time, if one of you has a flexible work arrangement, you might be able to enjoy some of the benefits of retirement while maintaining a paycheque. Or, if you just want some extra cash to finance retirement, staggering your retirement may make good sense.
Whom will I be with when I retire? Wife or wives, children in colleges or universities, friends, aged parents, etc.? This will inform you of the responsibility and obligations ahead. Do you know this can help you to decide when to marry and in your family planning if you are already married? Answering this Who – Question will help you in your retirement vision statement.
You might want to travel, while your spouse just wants to stay put after a career of business trips. That is not something you want to discover after you have both retired, as it has some hefty lifestyle and budget implications.
Have the conversation now to plan how you will fill your time. And if you are not aligned now, talk through your goals and priorities, and figure out how you might be able to accomplish what is most important to each of you.
Keep in mind, there are many hours in the day to fill. And while you might have some bigger-picture retirement goals, you might not have considered what your day-to-day life will be like. It is a good idea to discuss your daily retirement routine as well as your greater ambitions (such as travel, a business, or a move) well before you bring your box of desk contents home.
Will you stay in your current home? Will you downsize? Are you interested in moving closer to family or closer to the sun? Is a second home something you want to explore, so you can split your time between the two? Are going to remain in town or go to the village? Now is the time to talk about where you plan to live in your retirement and do the math to make sure you can achieve your vision.
When will you retire? You may have one target date in mind, while your spouse has another. Having a sense of when you will retire will help to kick-start your planning. At the same time, make sure you have a plan B should retirement come sooner than you expect. According to an Angus Reid survey “48% of respondents retired earlier than expected due to circumstances out of their control”, so make sure you and your spouse can be flexible and ready for the unexpected.
Why are you answering all of these questions the way you are? Have you put a great deal of thought into your retirement at this point, or are these just off-the-top-of-your-head responses? Think about why you want to do certain things in retirement, and carefully assess if this is really what you want to do. Remember, you do not have to live your grandparents’ retirement – the world is open to you and you have so many options for how you live the next 30 years or more.
Planning your retirement will require a number of conversations – with yourself, your spouse, your financial advisor, your family, and your employer. Staying ahead of the game by ironing out as many details as early as possible will help you create a smooth transition into retirement. And when you and your spouse are on the same page right from the start, you will be in a great position to make the most of the exciting years ahead.
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Written by Hay-R-Hay