Reg Jones Expert's View

Each year thousands of employees become eligible to retire; and thousands more are made eligible by the offer of an early retirement. If you are one of them, the big question is this: Should you retire now? Well, before you take the plunge, you need to discover whether that’s what you really want to do. Making such a radical change in your life requires forethought.

The first question you ought to ask yourself is this: “Am I ready to retire?” To find an answer, you need to evaluate your current situation. Be honest. Do you enjoy what you’re doing now? If so, are you ready to give it up? If not, is your main motivation for considering retirement a negative one? If that’s the case, be careful. You can live to regret decisions made in anger or through frustration. Retire when you are ready – not on impulse.

Next ask yourself this question: “What am I going to do with my time after I retire?” With average life expectancies hitting the upper 70s, you could easily end up spending as much time in retirement as you spent working. That’s a lot of hours to fill. Of course, if you are already well on your way to realizing a post-retirement goal, that’s great. Quite a few employees are in that category. They have already started a part-time business or are engaged in satisfying non-business activities, such as hobbies and volunteer work.

On the other hand, if you don’t have anything specific in mind, it’s time to start thinking real hard about what you would do in retirement. That’s especially important if you are married. Just remember – togetherness is one thing, being in the way or under foot is another.

Once you know why you want to retire and what you hope to do with your newfound freedom, it’s time to figure out if you can afford to retire. Will you have enough income through a combination of your retirement annuity, Thrift Savings Plan account, and other investments to enjoy the lifestyle you’d like to have? If not, are there any income-producing opportunities out there that will help you make up the difference? Depending on your skills and abilities, there may be quite a few. Or there may be none. Financially speaking, the bottom line is this: make sure that when you retire your current and future income will be sufficient to cover your needs – and as many of your desires as possible!

So there you have it, a three step approach to making a retirement decision: 1) decide if you are ready to retire; 2) figure out what you will do with your time when you retire; and 3) find out if you will have enough money to enjoy your retirement. Good luck!