Bank of Montserrat Ltd 
FINANCIAL INFORMATION MONTH
Whether it’s relaxing on rendezvous beach, hiking through Oriole trail, traveling around the world, or simply lounging around the house, we all have retirement dreams. You may not be thinking about your golden years, but preparing for the transition to retirement now can make life easier down the road. If you are considering retiring in 10 years, 20 years, or even 30 years, you really need to be planning your strategy for how you will make this happen. You will need an income, insurance, a place to live, along with some goals. This almost sounds like the lecture my parents gave when I graduated from secondary and later from university. The sooner you realize that retirement is just an extension of living, the better equipped you will be to plan for this event.
By definition, retirement planning is the process of establishing a retirement income goal and gathering information about your potential sources of retirement income. The information is then used to help determine if your projected retirement cash flow is adequate to fund your needs. Retirement planning involves setting aside enough money during one’s working years to provide income during retirement. It is about more than investing and saving. It’s also about enjoying your life after you decide to retire from your career or job.
We’ve all had days when we just didn’t think we could bear to continue working at our job. In the back of our minds we are secretly yearning for the day when we could tell our boss we are quitting. This is especially true when you are close to retirement age. You know it’s just a matter of time until you can take that amazing leap into freedom. But, is it going to be an amazing leap or a devastating crash? The fact is retirement isn’t for everyone. Unless you have some definite goals and plans about your future away from your job, you might be quite disappointed in retirement.
Financial wealth is important when planning for your retirement but you should also plan for the free time you will have once you retire. Many people have no idea what life might be like once they have retired from active work life. It can be the most rewarding experience or the most disappointing time you’ve ever had. You need to think about the financial side of retirement but the emotional and mental changes and readiness can be far more devastating than money issues.
Imagine not having anything to do at retirement, not having to get up or go to bed at any set time. You can eat, sleep, watch TV, take a walk, or just do nothing any time you want. Sounds like fun doesn’t it? Some people can enjoy this lifestyle indefinitely but most will be bored within a few weeks. If you’re retired, this could be your lifestyle for the rest of your life unless you make other plans. The rest of your retirement life could be 20, 30 or 40+ years; can you do nothing for that long? Think about it seriously.
When you start thinking about retiring, also start thinking about what you plan to do once you retire. Are you going to pursue a hobby, travel, volunteer, work? Just sitting around waiting to die shouldn’t be an option. Once you retire, you’re going to have lots of free time so you need to prepare yourself mentally and emotionally to handle this time.
Develop a plan by making a list of your interests and your goals. Prioritize this list with what is most important first. You might want to come up with a list of about 1000 things you want to do before you die. Remember, with today’s growing life expectancy you will probably be retired as long as or longer than you were working. If you have a spouse or partner, be sure to inform him or her of your intentions and your list. If they are also retired, make a combined list. If they are still working, you might have to compromise on when you will do some of the things on your list.
Estimate roughly how much money you’ll need to live on in retirement. A ballpark figure is a good starting place, and you can use a good online retirement calculator to get an estimate.
It may be difficult to consider that kind of long-term planning for retirement when you’re trying to meet college bills, your mortgage, and other obligations, but it’s worth peace of mind to start preparing for it as early as possible. In fact, compounding of earnings is so powerful that those who start saving for retirement in their 20s can amass large nest eggs with relatively little effort, as long as they invest regularly.
If you take a realistic look at your finances and learn where you are and what you need to do to develop a very specific plan against your lifestyle goals, you can have a successful retirement.
Article brought to you by the Bank of Montserrat Limited in conjunction with ECCB Financial Information Month.
