Are You Ready to Retire?

Are you ready to retire? How to know when it’s time to start thinking about retirement.

By Karin Price Mueller

Emotional Readiness

Retiring isn’t as simple as quitting your job. There are financial concerns, indeed, but just as important, you have to be emotionally ready for your new life.

"You can expect a period of tremendous confusion," says Dr. Judith Coche, a clinical psychologist and owner of the Coche Center in Philadelphia, Penn. "It takes about two years to go from one place in human development to the next place."

Coche says you should expect a transitional period, for example, as a new parent faces or as a couple faces marriage. She says it’s normal to feel confused and overwhelmed.

To help the transition, Coche says people have to develop goals for this period in life.

Joanne Fritz, creator of NotYetRetired.com based in Phoeniz, Ariz., says new retirees go through phases before they get settled into their new daily patterns. In the beginning, you might sleep as long as you want in the morning and enjoy the lack of structure that you were tied down to when you were working. But that’s only temporary, she says.

"Eventually you’ll want to something to structure your time and part of that is because we’re so used to having goals and moving towards them." Frtiz says.

So how do you set new goals? The same way you set the old ones, more or less.

Write a list of things you’d like to do. Whether its spending more time with your grandkids, taking a computer class or finally creating that killer garden in your yard, you need to decide which goals you’d like to accomplish.

As you think about the things you’d like to do, Fritz recommends you remember who you are, or who you were early in your working years and what things gave you pleasure back then.

"That means getting back to some of the things you’ve let fall by the wayside, perhaps a talent that’s been on the back burner while you were raising your kids," Fritz says.

The things you loved to do years ago can finally be restarted in retirement. Or, you can find new things that you’ve been eager to try, such as traveling, a new craft, a sport or another adventure.

Jon Dauphine, Director of Economic Security and Work Campaigns at AARP, says many retirees are spending their days mentoring younger generations and sharing decades of knowledge.

"They say it’s terribly rewarding to volunteer. They give help and they can pick and choose what they really want to do,’ Dauphine says.

Make a laundry list of all the possibilities and see how they may fit into your new schedule. See which friends will be around to share it with, or take this new start as a way to make some new friends.

But of course, you have to have the means to pay for it all. Financial readiness is the next item to examine before you retire.

Financial Readiness

The downturn of the stock market over the past several years hasn’t helped the nest eggs of most pre-retirees. 401(k) plans have turned flat, and you need to reevaluate the money you have to see if it will support the lifestyle you desire.

You need to draw up a new budget that takes into account how your expenses and income will change when you leave work. While you may have a pension or retirement plans to fund your retirement, there will be some new expenses.

For example, health insurance. You may have to buy an individual policy if the one from your employer will be discontinued when you leave work and if you’re not yet eligible for Medicare. Plus, because you’ll have more free time, you may be spending more money on activities than you did when you were working.

"People in retirement need a good budget as much as anybody else does," says Fritz. "It’s very important to be a realist about what you can afford to do."

Most people in retirement are not wealthy. Despite the retirement advertisements that show images of people on golf courses and out to dinner, most people have to be careful about how they’re spending.

AARP’s Dauphine says the "golf course mystique" isn’t reality, and that 75- to 80-percent of new retirees are finding a bridge job so they can phase down into full retirement. A part-time job solves two challenges, he says. Retirees can benefit from the extra income a job brings while slowly getting used to having time to themselves.

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