Now more than ever you need a retirement planning checklist.
On 1 January 2011 the first baby boomer turned 65 and the baby boomer flood started.
Described as a pig (or porcupine!) in the snake. This demographic extreme has had a major impact on the world.
Everyone will be affected ... hopefully not as badly as the python!!
For a long time, retirement was blissfully seen as a delightful transition from responsibility and the cost of children to the tranquil financial and physical freedom of retirement … to the wonderful world of "LAKAT" (life after kids at home)!
Wake up, the dream is over, wipe the sleep from your eyes. We are faced with a new reality. Drift into retirement at your peril.
It's going to be a long-haul exercise … so be prepared.
The following are ideas for your retirement planning checklist. As you work through the checklist you may find it quite iterative. And, at times, you'll feel you're going around in circles.
Many people will start their retirement planning checklist with the question "do I have enough money to retire?"
I suggest that this is the final question to ask. As its answer depends on the answers to the questions below.
When you eventually get to the financial planning stage here are some of the financial questions to think about:
- Do I have enough to meet all my objectives in terms of lifestyle, contingencies for the rest of my life and legacies?
- How reliant am I on social security and other state subsidization? Is there any risk with this? Do I think that the state has enough money to meet all its obligations for as long as I might need them?
- Are my financial resources sufficiently liquid for me to live off them? Remember that you can't eat bricks? At some stage assets may have to be converted to cash.
- Are they self-sustaining to the extent that I can live off the interest or dividends while the capital remains intact?
My personal motto is "retire with a purpose … or just start to die". I believe that at this stage of life it is especially important to have a meaningful purpose.
Preparing your checklist
In most cases we are unprepared. For many people retirement is going to be tough and there are many reasons for the saying "old age is not for sissies".
- Carefully think about all the elements of retirement in your retirement planning checklist. Understand exactly what "retirement" means to you and your spouse or partner? Do I plan to continue working or not? Is the work I'm doing now what I want to do in the future? Will I have a new venture? How long do I think I'll want to, or must, work? Have I thought about defining a meaningful life in terms of earning, family, recreation, and charity or "giving back"?
- Retirement is likely to be a long-term project which, like all of life, will happen in stages. Some stages will go along as planned but others will be shocked by unforeseen events. Ask the question, am I prepared, financially and emotionally, to face and handle them?
- Where will I live? Am I considering relocating? Is this by choice or necessity? Do these considerations involve my children? Have I discussed these ideas with them? If I relocate, will this be a easy, same town, same state, same country move? Or will I consider the challenge of moving overseas?
- Am I prepared for the likelihood of increasing healthcare costs? The possibility of requiring long term care?
- Do I have a written retirement plan which I'm reviewing annually or when there's some major unforeseen change?
- Unfortunately, as we get older, we tend to accumulate more and more baggage. Are my decisions irrationally influenced by my biased prejudices and opinions which may prevent me from making the most of my retirement?
I hope that this retirement planning checklist will jolt your imagination. Seeing retirement as a wonderful opportunity to start to live rather than a meaningless drift into extinction!