Inflation, high interest rates, and rising costs of living are taking a toll on consumers’ wallets and savings, thus hindering many Americans’ retirement plans. The data is alarming, for example a recent Allianz Life study found that 61% of Americans are more afraid of retiring than dying.
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While the conventional wisdom is that people decide to retire when they reach certain milestones, often associated with reaching a certain amount in their bank account or retirement savings, some Americans took a different approach, prioritizing other criteria and deciding to retire early.
That was the case with James Allen, founder of CPA, CFP and Billpin.com, who retired from financial planning at age 46 after holding the position for 19 years.
“Retirement isn’t just about reaching a certain age or financial milestone,” Allen said. “This is an emotional journey, a transition as important as any other life-changing event.
“When the job I once loved started feeling more like an obstacle than a passion, I knew it was time to retire. I found myself daydreaming about opportunities to spend a lot of time feeling as if work was getting in the way of my personal goals, which made me realize my priorities were shifting. It was a clear indication.”
Check out 9 signs you’re ready to retire.
“Preparing for a long voyage”
Allen explained that preparing for retirement is “like preparing for a long voyage.”
Instead, he said, you need to make sure you can afford the trip. He consulted with financial advisors and weighed his savings, estimated Social Security benefits, and retirement budget to determine his course.
“Having a strong financial foundation was critical to alleviating anxiety about future voyages,” Allen said.
But Allen also stressed that retirement is not just about financial planning, it’s also about mental preparation.
“I liken it to standing on the edge of a diving board and looking into a retirement pool,” he said. “I feel a mixture of anticipation and anxiety.”
So, to ease this transition, he began to focus on relationships outside of work, cultivating social interactions that would continue after retirement. Additionally, he began exploring interests outside of his career, saying, “It allowed me to dream about the possibilities that lie ahead.”
“At the end of the day, retirement is not the end, it’s a new beginning,” Allen said. “This is a chance to redefine your identity outside of your career and embark on a new adventure. This is a journey that requires preparation, self-compassion and a willingness to embrace change. It’s like listening to a song that moves your soul and you can’t help but dance, and then you know it’s time to retire.”
imparting financial wisdom
Allen said he has been on a journey of exploration and giving back since retiring.
“I use CFEI [certified financial education instructor] It’s a certification for mentoring future financial planners,” he said. “It has been a rewarding experience to pass on the wisdom I have gathered over the years and watch the next generation of financial minds grow and develop. I think it’s my own way of doing it.”
He also invested time in developing himself, adding that he took up painting, a hobby he had always wanted to explore but had no time for.
“This has been a fascinating journey of self-expression and creativity,” he added. “I have found it to be a great way to relax and reflect on my experiences.”
Traveling was another important part of his retirement, including places he always wanted to go but didn’t have time for, such as Japan and New Zealand.
Finally, Allen said volunteering was part of his retirement life.
“I have worked with local charities that provide financial education to disadvantaged communities,” he said. “It was a humbling experience to use my skills to contribute to society and make a difference.”
What do the experts say?
Experts say that while deciding when to retire is a highly personal situation, there are steps that pre-retirement people should consider to ensure a smooth transition.
These include financial preparedness and a clear assessment of your savings, investments and pension plans to determine if you have accumulated enough funds to sustain your desired lifestyle into retirement. .
“Consulting with a financial advisor can help you assess your financial situation and develop a comprehensive retirement plan,” said Cameron Barsky, managing director of Cornerstone Financial Services. Stated.
In addition to lifestyle goals, health considerations are of course also important.
Retirement is a significant life transition that allows individuals to pursue their passions, hobbies and interests. Considering your own personal goals and aspirations can help determine the right time to retire, says Barsky. You may want to travel, spend more time with your family, volunteer, or pursue new entrepreneurial ventures. Reflecting on what you want to achieve in retirement can help clarify when to make the leap.
Finally, Barsky echoed Allen’s sentiment, saying retirement is not just a financial decision, so it’s important to consider mental preparedness.
“Remember that retirement is a very personal decision and what works for one person may not work for another,” Barsky said. “It’s important to carefully assess your situation, goals, and financial situation. Seeking advice from a retirement or financial professional can provide valuable insight tailored to your specific needs and aspirations.”
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This article originally appeared on GOBankingRates.com: How I Knew It Was Time to Retire