You’ve got big plans to retire in ______ when _____. (Insert your favorite number and phrase here.) Can you really do it then? One way to check:
Test-drive your plans to retire.
First, take stock. Not just of stock — cattle, IBM, etc. — but your assets. How much is in your bank and/or retirement accounts? Got anything socked away in hard currency, like gold or silver? You want to be thorough on this; think of it as a chance to also clear out banks or coins scattered on your dresser. (Husband had a bad habit of dropping loose change in his top drawer. Combining it with a tub of coins gleaned from the laundry, plus a piggy bank or two, gained us more than $45. That money went right into our fund.)
How much do you currently owe? Are your vehicles paid off? How about student loans? And finally, if you own a house, are you mortgage-free? (At the very least, if you’ve paid off 20% of your home mortgage, you can save every month by cancelling your PMI, or Private Mortgage Insurance. The Homeowners Protection Act of 1998 lets you do it — though some mortgage companies will require you to ask in writing. (We learned this the hard way when I called our mortgage company to cancel, and was told it was not possible. A few years later, when we retired the loan, I found out differently.)
Any appreciable debt is going to get in the way of your test-drive. You’re much better working to pay it off now, even if you don’t retire any time soon.
Now you know what you have to work with, if you were to retire today. Could you do it? If not, can you stretch current assets by:
MLF has plenty of posts on different ways to get more and spend less — use the ‘search’ button to find your needed subject. Stash any money saved — that’s the key to boosting your future savings.
Test Drive: Do you have income sources that aren’t active now, but will be? (Social Security and pensions come to mind.) If you begin new ways of saving now, will that extra, plus the new income, be enough? If not, you need to start considering other actions to try.
Take a sabbatical. Or just plain Time Off. Save your vacation, and use it on a week or month away from home — preferably in a state (or country) you’ve considered retiring to. Take a language class. Visit the restaurants, and talk to the locals. Is this a good place to live? Would they move here again? What about the weather…does it change much? Check on prices for food, rent, etc.
If you don’t have funds or time off to travel, take a day, instead — or at least an evening. Read up, check out magazine articles or travel videos. Take it one step further, and eat a typical food from that spot. (If your wallet is too empty for eating out, check the internet for recipes, or stop by the grocery store. Our local shops stock everything from enchiladas to sushi and kimchi.)
At the very least, this test drive will get you out of the rat race for a while — something we could all use.
Now you know what that feels like, slow down for a week.
You may not want to turn down work or opportunities…those are income, and you still need it. But would it kill you to read a chapter of a book, practice ball with a grandson, or sit out in the sun for a few minutes? Give yourself time to sew a quilt, or talk to an older person. (You’d better do it now –they may not be around when you actually retire.)
Once your test drive is over, take time to review. Did it go well? Did you have enough (or more than enough) to get by? You should have a better idea, though, whether retirement is a good idea now, or in the near future.
Maybe you need to think about it some more. Maybe you need to research, like this case study of a couple who thought they couldn’t–but could. But at least, you’ve got a start.
Good luck, and happy planning.