No matter how much retirement planning you do, you cannot know whether your plan will work for you until you put it into action. Much like test-driving a car or trying on a shirt before you buy it, testing out your retirement plan to see if it fits can be a great way to see what retirement will look like. This trial run may help you avoid surprises or mistakes in retirement, and the things that you learn can influence decisions you make about retirement planning.
Spend time testing out your retirement plan.
Why You Should Give Your Retirement Plan a Trial Run
Giving your retirement a trial run is a great way to learn some things about yourself and determine if the retirement plans you have made are feasible. This trial run will also make the transition to life after work a bit easier because the things you learn during your test-drive will also help you make more informed decisions about retirement planning.
Dee Lee, a financial educator in Boston, suggests taking two months off and living just as you would in retirement, using the same amount of income that you would have during this time. Regarding the retirement trial run, she says, “That’s what a dress rehearsal does. It’s going to give you a really quick and dirty idea of whether or not you want to retire and if you can afford to retire.”
Is your retirement plan feasible? It may be time for a test-drive.
How to Test-Drive Your Retirement
To test-drive your retirement, begin by slowly introducing elements of your retirement lifestyle while you still have time to make adjustments. Scott Holsopple, President of Smart401k, suggests doing the following during your trial run:
• Try out your retirement budget. Estimate what your retirement income will be and try living on the retirement budget that you set. This is a good way to determine if the budget works or if you need to adjust your budget and save a little more before retirement.
• Downsize now if that’s what you plan to do in the future. You don’t necessarily have to move to your retirement apartment, but try downsizing your space ahead of time to make sure that is what you want. This also includes transportation. If you plan on utilizing mass-transit, make sure that this is feasible during your trial run.
• Try out retirement hobbies and activities. Spend money trying out retirement activities while you are still working. That way, you will know if you like these hobbies before pursuing them in retirement.
• Visit your retirement location frequently. If you plan on moving in retirement, be sure to get involved in your retirement location ahead of time. If it’s not feasible to move right away, visit the area and participate in activities to get a feel for the area.
A trial run is a great way to see if you have enough saved to support yourself in retirement.
Testing out your retirement plan allows you to see whether your ideas about retirement are realistic. The experience will not only give you an idea of whether you are saving enough to fund your lifestyle in retirement, but it may also help you determine what sacrifices or adjustments you might need to make as you approach retirement.
Before a Real Life Retirement Trial Run, Be Sure to Use a Retirement Calculator
Knowing how much you have for retirement and how long your money lasts are important first steps for a retirement trial run. A good retirement calculator can help you figure this out.
The NewRetirement Retirement Calculator can model your retirement budget over time. It can also tell you if you risk running out of money and much more.
