The word retirement is typically synonymous with the figure ’65’. Almost everyone thinks of retiring somewhere in their early 60s and usually plan their post-retirement goals a few years ahead of that. However, things have changed drastically over the past few years. With a plethora of alternate career options, expansion of individual preferences and a marked upgrade in lifestyle, there is no set age for retirement anymore.
But then again, retirement is entirely a personal decision which is based on plenty of factors such as your financial status, health, individual goals, and dependents.
Got a financial plan?
Whether you picture a fancy lifestyle or a frugal one post-retirement, you need a financial plan for the future. While most people start saving for their retirement very early in their career, there are many who do not set aside a single dirham until they are well into their 40s. It’s the size of your savings by the time you reach the decision-making age that makes all the difference.
If you want to know when you should retire without regrets, first calculate the amount of money you need to save up for your future. You will find various online calculators that will show you how much you need to save presently (depending on your age) to maintain the type of life you want post-retirement. Usually, the rule of thumb is to save eight times your annual salary to boost the chances of keeping your lifestyle intact. Once you know the amount of money you need to have in your retirement nest egg, you will be able to work out the age by which you will have enough money saved for a secure future. Also, make sure that you aim for 15% more than your actual target to account for factors such as inflation, medical emergencies or other unpredictable life events.
Tip: If you are in your early 20s and 30s with no immediate retirement plan, it would be wise to start chipping in right now to make sure you reach your target early and even exceed it without making any financial sacrifices late in your career.
[Related: Retire in peace: 5 steps to take today]
Life after retirement
The very first thing that you need to consider is how retiring will have an impact on your present lifestyle and whether you are okay with how things pan out once you stop going to work. For some, an ill-timed retirement can have a negative impact on their lives as they may find themselves cutting down on a number of things such as housing, car, recreation etc., to adjust to the new life.
In other words, those looking to maintain a high standard of living even after retirement should consider working longer to chip in for a better future. At the same time, there will always be some who are okay with downsizing even if it comes at the cost of early retirement. Be it in your early 50s or 60s, the decision to call time on your career should be taken only when you are okay with the type of life that follows your retirement.
A career beyond 9-5
Most people hang up their boots to lead a laidback life without any stress of work. A majority of them even pick up several hobbies to keep themselves occupied. However, there are some who just can’t lead their lives without working and being productive, and often consider entering into an alternate line of work.
If you think you are done with your 9-to-5 job and wish to start something of your own, then an early retirement can be considered. However, beginning something new, even after weighing the pros and cons, can be risky, especially so late in your life. Therefore, it is wise to seek professional advice and have an emergency fund set aside, just in case things do not work out the way you intended.
[Related: Got a financial plan for your retirement?]