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5 Reasons to Plan Retirement Activities Before Leaving Your Job

If you're still five, ten or even 20 years away from retiring, then what you will do after you retire might be the farthest thing from your mind. You're probably busy and have your career to focus on. If you still have kids at home, it's all you can do to keep track of all their activities and needs. Maybe you dread growing older and you would rather not think about being retired until the time comes.

Here are five reasons you shouldn't wait until you retire to figure out what you're going to do with your life after you end your career.

[See: 12 Ways Retirees Spend Their Newfound Free Time.]

1. If you're going to start a business, there are many things you can do before you leave work. Many retirees start their own business after they retire, either because they need the money or because it's something they want to do. People between ages 55 and 64 often have the ideal mix of skills and experience to become successful entrepreneurs. Your business can be consulting, selling art or crafts, running a flea market booth, training, speaking or freelance writing.

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Most businesses take a couple years to ramp up. Before you leave work, you can develop contacts, get training or certifications you may need and even start developing your business during your evenings and weekends. Then when the big day comes, you can hit the ground running.

2. You might be forced to retire sooner than you plan to. Early retirement could be precipitated by an injury or illness, an attractive early retirement package or a layoff. Perhaps you'll need to retire ahead of schedule to take care of your spouse or a parent. Regardless of the circumstances, if you assume that you still have a few more years to think about how you'll spend your retirement days you will be unprepared if retirement comes sooner than expected. While many people consider the standard retirement age to be 65, it's a good idea to prepare for the possibility of an early retirement in the years leading up to age 65.

[See: 10 Retirement Lifestyles Worth Trying.]

3. It gives you something concrete to look forward to. Most Americans are financially underprepared for retirement. There are many possible reasons, but one reason is that people have little motivation to save when they don't know what they are saving for. Having dreams and goals for the future gives you direction, hope and optimism. If you can create a clear vision for how you want to live after you retire, you will have a better idea of how much money you will need to save in order to enjoy the retirement lifestyle you envision.

4. It allows you to create a more realistic retirement budget and determine whether you're saving enough. The amount of money you'll need is highly variable and dependent upon the lifestyle you wish to enjoy after you retire. Decide whether you want to continue to live in your current house or downsize to something smaller. Perhaps you could move to an area where the cost of living is lower than where you live now. Alternatively, your costs might increase if you want to do extensive traveling. Some people are willing to search out senior discounts and live as frugally as possible, while others are unwilling to change their shopping and dining habits. The hobbies and recreational activities you plan to engage in will factor into how much money you'll need after you retire.

Some people find it helpful to try living on their anticipated retirement budget for a year while they are still working. You may not be able to completely simulate your anticipated retirement experience -- for example, you'll still incur the cost of commuting to work and you may not be able to travel as much as you hope to after you retire -- but this exercise should give you a good indication of whether or not your retirement budget is realistic.

[See: 10 Places to Retire on a Social Security Budget.]

5. It might be easier to buy your retirement home while you still have a working income. Once you quit your job, it may be harder to qualify for a mortgage or receive approval for other forms of financing and credit. You'll almost certainly have a reduced level of income. Similarly, if you plan to tour the country in a recreational vehicle or buy a boat, those things might be easier to buy while you're working.

While it's important to live in the present, it's also essential to have some idea where you're heading. Make a list of things to look forward to. By visualizing and defining what your life will be like after you retire, you will be able to lay some of the groundwork to ensure that you can enjoy the retirement lifestyle you want when the time comes.

Dave Hughes is the founder of Retire Fabulously.



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