The Importance of a Retirement Plan

Saving for Retirement


Making the Decision about Retiring

This is probably the hardest decision you will have to make. During your life you will have made important decisions about marriage, children, jobs and moving house but nothing compares to making the decision about retiring.

If you've been lucky enough to have been in employment for the whole of your working career then the decision may be even harder. If you are made prematurely redundant then the decision is out of your hands, even though it's a shock to the system.

But having worked year in, year out, you have an established routine and that routine gives you security. To decide to retire brings an opportunity for a new beginning but that, in itself, can take away your confidence. Leaving work and being completely retired may give you the feeling that, 'nobody needs you'. Of course, it isn't true but you are not now surrounded by work colleagues who are demanding reports finished or products ready for collection. You are on your own and the social buzz of the work environment is no longer in your daily grasp.

What Effect does Your Retirement have on Your Partner?

You lifestyle will be different after retiring. You will be at home much more and sharing your time with your partner. Both you and your partner will have to adapt to all this time together. It is important that you are both aware of needing 'space'. You both need time to adjust and to pursue your own activities separately. Spending some time apart leads to an enlivened discussion about what you have both done during the day and you return to your home refreshed.

Retirement is also about sharing chores so that both of you can relax into your retirement.

Picking the grapes in a South African vineyardCredit: TerriePlowman

It also means you have the energy and enthusiasm to plan for any holidays away or trips out.

When to Make the Decision about Retirement


Before you can make the decision about when to retire you have to consider your finances. You will be taking a huge cut in salary so you must assess your current financial situation, consider where cuts can be made without affecting your lifestyle drastically, and plan your future budget. Naturally, you won't know exactly how much you will need for your monthly needs but you will have more time to spend less money so planning your finances is crucial.

Try to limit your spending one to two years before your planned retirement date. Cut out unnecessary spending on luxuries that you don't really need every month.

Keep a detailed spreadsheet of all your spending, including energy costs, food bills, car expenses, any re-payment arrangements, holidays and luxuries. Try to record all details like birthday presents, theatre trips, alcohol etc.

After your first year of this financial plan, review it and plan a new budget for the next year, that is, the year before you plan to retire.

Once you feel happy that you can manage your lifestyle on a reduced income then you may feel more comfortable about making the final decision.

Investigate the Possibility of Part-Time Employment at your Place of Work

If you are worried about moving from  full-time employment to complete retirement then investigate the availability of part-time work. This helps your transition from work to retirement. If part-time work at your current employment is not available then make enquiries elsewhere. Your skills are probably much-needed and an employer may be grateful for just a few hours of those skills.

Golf is a very sociable event for retired peopleCredit:

Planning Your Free Time

If you have been a dedicated employee who has had little or no time for hobbies then you will probably be in for a shock. To have so much free time every day can lead to despondency and lethargy. It is important that you begin to consider how you will spend your days well before your retirement. Is there a skill or a subject that you have always wanted to master but never had either enough time or the energy for it? Now is the time to begin researching all the possibilities and there will be lots of them.

Volunteer work is also popular with retirees, whether you have a connection with a particular charity or your local library needs support rather than close it's doors from lack of funding.

Distance learning, day or evening classes or activity groups like learning bridge are all available.

There is also a great opportunity to travel. You can book short or long trips during schools' term times and avoid paying extortionate rates. Of course, you will plan all these activities with your budget in mind. Remember, that spreadsheet needs to be kept up to date. Or just make sure you have all the expenses in a well-visited note-book.

The list is endless. You will find something to suit you.

Coming to Terms with the Decision

So, planning for retirement is complex. Remind yourself that the planning should start 2 years in advance with a careful and realistic look at your financial situation. Once you have given a lot of thought to what you will do during those long winter days and nights when the weather is dull and dreary and you have discussed your situation with your partner, then you should feel more mentally calm about the big leap. And you should know how much your possible activities will cost.

It will continue to be a leap into the unknown. Your consolation is that many more retirees have done the same. You will have heard some extolling the virtues of doing what you want, when you want. You don't have to get out of bed early and commute to work with the masses. But you will also have listened to people who are lost. They have no hobbies and perhaps have no partner.

If you have planned ahead and wrestled with the hard questions of finance and time on your hands then your transition to retirement should be less stressful.

Even so, the build-up to your last day at work can be traumatic. So be prepared and plan, plan, plan.

Discussing with those who have already retired will help you with your plans, even if it's a case of, 'you're not going to do what so-and-so has done with his retirement'. Negative vibes can help you in a positive way.

Finally, if you have a partner, talk, talk and talk about your worries. They may be retiring, too and they will need to have support as well.

As a retiree of 8 years, I have trodden the path above and now I hope I am a stable retiree enjoying a full retirement. The first year or two allows you to be really flexible. But later you may want a new challenge. I took up a Writers' Bureau Creative Writing Course and allowed myself two years to complete it. I achieved my deadline and have not looked back.

Make an effort and you will love your retirement. Sit back, do nothing and you will vegetate!

The choice is yours!

Good Luck!