Eve Pentecost: Is golf your ideal retirement?
Aug 21, 2009 | 4193 views |  0 comments | 27 27 recommendations | email to a friend | print
When does a person have enough money to retire? Many companies regularly allow retirement specialists to host seminars for employees about early retirement options; however, it is important to remember that retirement isn’t just a numbers game.

Suppose you are a hard-working professional who has crunched all the numbers and you’ve determined that your situation is financially sound. You can retire today. What are you going to do when you retire? Play golf seven days a week? Shop? Garden? After working most of your life, what are you going to retire to?

How you envision your retirement is vital in determining the amount of financial resources necessary to fund a certain retirement lifestyle. A retirement packed with vacation cruises and travel will require considerably more funds than piddling around the yard or volunteering in the local community.

Other important financial aspects include whether you have the house paid for, whether you have accumulated significant debts, the basic cost of daily living, and potential health expenses. Of course you will need to evaluate whether your anticipated cash flow from Social Security, a pension or retirement account will adequately fund your desired retirement. The American Education Savings Council’s Ballpark Estimate at www. choosetosave.org is one of many good online tools to help you examine the numbers.

Be cautious in assessing whether you can pay for a retirement lifestyle and be sure you are getting solid advice. Earlier this year, Morgan Stanley was ordered to pay more than $7 million to resolve regulatory charges relating to misconduct in early retirement investment promotion.

Even if you can definitely pay for a retirement lifestyle, are you ready? Students in my psychology of money class often start the semester by asking, “Why wouldn’t anyone retire tomorrow if they have enough money to do so?”

A major reason is because people are living longer and healthier in retirement. If you retire early you could easily be retired 30 or 40 years, and with good luck be in excellent health for most of that time. Evidence shows that many people who retire wish to return to some form of work before long. One survey found that half of retired baby boomers wanted to return to work — half due to a lack of money; the other half because of missing friends from work or plain old boredom.

What does retirement mean to you? It may mean financial freedom to make choices. Perhaps it means leaving the work force altogether. But it may mean continuing part time or perhaps switching into a different job that doesn’t pay as much but is something that has always interested you.

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