So You Think You are Ready to Retire?

By Kathleen Zenisek

If you’re contemplating retirement there are many important considerations. Two factors in particular, can derail a retirement dream: financial and emotional influences. Having the financial resources to support yourself for the rest of your life is key to determining your retirement date, but don’t underestimate the emotional effects that retirement can have on you.

Define Your Retirement
Before you can figure out if you have enough money to retire, you need to define your retirement lifestyle. Will you stay in your current home or neighborhood? Will you relocate or downsize? What activities will you engage in (part-time work, hobby, sports, charitable work)? How will you keep physically and mentally fit? If you are married, does your lifestyle align with your spouse’s?

Are You Financially Ready?
Next, you’ll need to see where you stand financially. Start by figuring out how you’ll generate income in retirement. How much have you saved? Do you have a pension? How much will Social Security provide? Will you work part time? Will this income generate enough money to cover your lifestyle retirement expenses? Expenses may drop in retirement depending upon your lifestyle, but not by as much as you might think. You can expect to spend about 85 cents in retirement for every dollar spent before retirement. Keep in mind, you may need to save more to cover medical expenses.

Debt + Retirement = Don’t Go There
You do not want to enter retirement with loads of debt. Before you retire you should pay off larger debts including your mortgage, cars, personal loans and credit cards. The more debt you carry into retirement, the more retirement income you’ll need to pay off what you owe.

Medical Expenses – the Big Unknown
Your largest expenses in retirement will be housing, food, transportation and health care

If your employer will continue to provide health coverage for you (and your spouse) in retirement, consider yourself very lucky as most employers do not.

You are eligible for Medicare when you turn 65. You can learn about Medicare coverage and supplemental plans at If you retire early, you generally have to get an insurance policy on your own. You can consider COBRA, which allows you to continue your employer-offered coverage for 18 months or you can buy a policy on the exchange. An insurance broker who specializes in medical plans can be of great value here.

Practice Being Retired
A tried and true retirement test is to “practice being retired” for up to two years prior to the real thing. This entails living off the annual cash flow you estimate you’ll need in retirement.

Portfolio Realignment
Prior to retirement you’ll want to revisit your investment portfolio. You still need your portfolio to grow over a couple of decades or more, which means being invested in stocks. Experts say your mix of stocks should be about 55 percent to maintain growth with the remainder in bonds and cash to guard against market volatility.

Are You Emotionally Ready?
You can’t discount the emotional upheaval that might occur once you leave your career behind. You’ll need to ask yourself what you will do once you are retired. If you don’t know, an unstructured retirement may not deliver the feeling of importance, sense of accomplishment and social interaction that work provided.

Without a doubt, retirement is a major transition and requires an emotional adjustment. To help bridge the transition, consider taking classes, joining a social/ charitable group or exploring hobbies you enjoy while still working.

Kathleen Zenisek, former First Vice President of First State Bank, checked off all the boxes and decided she was ready and retired in July. She plans on binge-watching Downton Abbey, reading, cooking and traveling.

Sign up for our email newsletters

Share This

Share this post with your friends!