Determining When You Are Financially Ready to Retire

this post answers the following questions
1. How can you know if your financially ready to retire?
2. Why you should consider your emotional state on your retirement?
3. How work is a big impact on your retirement?
4. Why consider how much money you have before retirement?
5. Is it good to invest your retirement Money?

The decision of when you are ready to retire is a major component of your life’s plan. As personal as your decision about when your retirement will begin is, there are some very important things that anyone could observe that you need to get settled first. While not everything about your finances and your emotional state is visible by someone else, some things are readily apparent to anyone who takes the time to notice them. The following are a few of those things that can influence your retirement decision.

Your Emotional State

As much as most people hate to admit it, the fact is that most of money is emotional in nature. When your emotions are out of whack, nothing feels right regardless of how technically stable or secure you might be. Even a life that a lot of people would kill for will seem bad if you’re struggling with depression. Sometimes this is a chronic problem that has nothing to do with your financial or professional life, but other times it’s something that needs to be dealt with before you take the plunge off the professional pier.

How Important Work is to You

A lot of people actually spend a large portion of their lives thinking of themselves professionally first, and everything else secondarily. If you have essentially constructed your entire self image to be that of a worker first and everything else second, you may be in for a world of hurt if you suddenly stop working. This may have little or nothing to do with how much money you have, or even how much free time you have after family, home responsibilities and other things take part of your day.

How Much Money You Have

There is never truly enough money for anyone. Everyone who has ever been honest with themselves understands that they can never have enough money. They also understand instinctively that no amount of money can truly make a person happy. For better or worse, though, there is a threshold of money you may need to retire on, and this is a figure that can be printed in black and white. If you don’t have this much, something is going to have to give. The weakest link tends to be when you want to retire.

retirement

Photo source: http://www.flickr.com/photos/68751915@N05/6870886851/

How Much Cash Flow Your Investments Generate

A lot of people invest for capital gains, and that’s fine. However, if your retirement investments aren’t producing cash on a regular basis, you may find yourself running out of money early. You don’t want to have to tap your principle unless a dire emergency happens.

Your retirement date is yours to decide. But it isn’t just about money. Be very judicious about when you decide to stop working, because it’s a decision that can be hard to recover from if it’s made errantly.

About the Author: Moises Vehrs is a retired financial planner. He stresses the importance of retirement planning to everyone he speaks to and in his spare time still enjoys watching the stock market and studying successful entrepreneurs like Timothy Sykes.

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