Tag Archives: Pre-Retirement

Shifting Mental Gears after Retiring

If you’re one of the few individuals who enjoy a fulfilling career, you might not have even thought about retiring yet. However, this time of your life will arrive before you even realize it so it’s essential that you plan for it not only by ensuring that you save enough money, but also by preparing yourself mentally and emotionally for your last day of formal employment.  


Think about the Next Step you’d like to Take

Will you be retiring completely or would you prefer to start working fewer hours or in a part-time capacity after you have formally retired? 

Individuals often think that once they’ve left the office on the last day, they will no longer be doing their part in contributing to society. However, this could not be further from the truth because having more time on your hands will allow you to spend time assisting people around you in various ways. For instance, you may be passionate about assisting the elderly in your neighborhood, so volunteering at your local retirement center will still enable you to make a huge difference in the lives of other people. 


Search for New Hobbies and Interests

It may not seem like the right time to look for new interests or hobbies while you’re still employed. However, research has revealed that individuals who already have one or more outside interests while they’re still employed will normally find it a lot easier to move into retirement or semi-retirement than people who have only focused on their careers through the years. 

Exploring different hobbies and interests before you leave your job for good will help ensure that you don’t find yourself with too many long and boring hours to fill afterwards.


Consider Setting up a Business of your Own

Many people are under the impression that they will be tool old to establish and run a business if they have already retired from the working world. However, the saying, “You are only as old as you feel,” most certainly applies here because there is nothing wrong with starting a new business pertaining to a special area of interest or even a hobby that you might be passionate about. 

Starting your own business will not only help provide you with a way to keep yourself occupied during the day; you will even be able to continue earning an income, which can be quite handy in these tough economic times. A good example of a part-time business that you could start is dog walking, for instance. You will get to spend time with animals, while also keeping fit and healthy at the same time. 

Walking out of the office building for the last time does not mean that you will be relegated to a life of sitting around and doing nothing. These days, a number of retirees have discovered that they are now able to enjoy a far more fulfilling lifestyle after they have left the office than they ever thought would be possible. 

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Should You Pay Off Your House Before Retiring?

Most people hope to purchase a home during their lifetime, and a large portion of them succeed. In today’s world, the average homeowner is around 32 years old. With a 30 year loan still being the most common mortgage taken out, that places the average time for paying off a home at 62 years. Things do happen, however, and a few missed payments or placing a loan on hold for emergencies (a rare but possible occurrence) could place that loan a few years past 62 – which also happens to be the earliest age people can retire and begin drawing social security benefits.

If someone doesn’t purchase a home at 32? Populations living below the poverty line or saddled with large amounts of student loan and credit card debt often have to wait longer before they can make their dream of purchasing a home a reality. If that 30 year mortgage loan isn’t obtained before a person turns 37, they can’t pay off their loan prior to full retirement (and social security benefits) at age 67 – unless they make early payments.

But does this even matter? Is it necessary to pay off your house before retiring, or is it okay to make payments in your post-working years?


Paying Off Your Mortgage Pre-Retirement is Preferable

If it’s at all possible, most experts recommend doing away with any large debts before you enter retirement. In addition to your mortgage, this includes any car leases, student loan debt, or credit card debt.

The reason you would ideally have all your major debts paid off is that it decreases your overall cost of living when entering into retirement, which sets you on a fixed income. This stretches the money you’ve saved for retirement so that you can live comfortably.

Let’s say, for example, that your utilities average $500 a month, and your groceries (for two people) averages $400 a month. During your working years, you also have a $1,200 monthly mortgage payment, $200 monthly car payment, and $100 in various debt reduction payments. Eve if you have to stretch your budget a little thin for a few months, or even a year, making early payments to get rid of at least two of those debts can significantly lower your costs of living. Ideally, you would pay off your mortgage before anything else, as this is the largest payment for most people.

Having A Mortgage Isn’t Always A Financial Death Sentence

If there is no plausible way to pay off your mortgage before you retire, it isn’t always a financial death sentence. You would need to account for those payments when planning your finances, however, which increases the amount of money you’ll need to save.

Even if it isn’t totally paid off, those who are nearing retirement should aim to have as few years left on their mortgage as possible. This way, you will only have to really stretch your budget for a short number of years before you’re able to enjoy your hard-earned and well-deserved post-working years more thoroughly.

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