3679: 5 Signs You Are Not Ready for Retirement by Mike Ballew of EggStack on Retirement Planning

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[00:00:54] This is Optimal Finance Daily, 5 Signs You Are Not Ready for Retirement, by Mike Ballou of Eggstack.com. And I'm Justin Malek here reading to you every day with permission from the authors to help you save more, earn more, and invest the rest. So with that, let's get right to it as we optimize your life. 5 Signs You Are Not Ready for Retirement, by Mike Ballou of Eggstack.com.

[00:01:27] Retirement is the cherry on top of a life well-lived. Doing it right requires careful planning. You might be anxious to bid farewell to your employer, but you have to be ready. Here are 5 Signs You Are Not Ready for Retirement. Number one, financially dependent children. As discussed in a previous article, Still Supporting Your Adult Children,

[00:01:52] financially dependent adult children are the number one reason Americans are not saving enough for retirement. It's something Clark Howard has been preaching for years. Save for retirement first, then support for your children. We have an epidemic today of failure to launch adults who are perfectly capable of supporting themselves. Instead of standing on their own two feet, they remain financially dependent on their parents.

[00:02:21] What do birds do when their chicks get old enough to fly? They kick them out of the nest. Are we not smarter than birds? Cut the cord and set your adult children free. You'll actually be doing them a favor. It's not something that you don't already know. You just need to be honest with yourself and do it. Number two, home mortgage. Are you 5 to 10 years out from retirement, but still have 20 years left on your mortgage?

[00:02:51] Think you're ready for retirement? Think again. For starters, you should have never taken out that 30-year mortgage. For a few extra bucks each month, you could have had a 15-year mortgage. If you are in this predicament, don't despair. There's still time to get it right. Most mortgage providers allow you to pay more than your regular monthly payment to shorten your mortgage term.

[00:03:16] You can pay your mortgage off before you retire. You just need to increase your monthly payments. Contact your lender or use an online calculator like the one at NerdWallet to see how much more you need to pay each month. When your mortgage is paid off, you will still have property taxes and insurance, but they are much less than paying them together with a mortgage payment. Number three, personal debt.

[00:03:42] Your home mortgage is not the only thing you need to pay off before you retire. Walking away from a job with thousands of dollars in personal debt is a recipe for disaster. Ever heard of a boomerang employee? It's someone who retires and discovers they didn't save enough. Back to work they go. Credit cards are a wonderful convenience, but they can become a trap if you don't pay them off each month.

[00:04:10] Number four, insufficient savings. You have no doubt heard that it's never too early to start saving for retirement. It takes a lot of money to bridge the gap between Social Security and the typical American lifestyle, not to mention inflation and the rising cost of health care. Social Security was never meant to be a retiree's sole source of income. You need a significant amount of savings to supplement Social Security. And number five, inadequate planning.

[00:04:41] We've reached the end of our countdown of five signs you are not ready for retirement. Number five is inadequate planning. This is yet another misstep that can result in you becoming a boomerang employee. You'll tell your co-workers, It just wasn't for me. Retirement is not all it's cracked up to be. It is if you have a plan. If you think you're all set to retire, but you've got no hobbies and no social network, you're not ready to retire.

[00:05:11] You probably think you will find something to do after you retire. You won't. You'll end up watching cable news all day until you go bananas. The average retirement period is 18 years. That's a lot of cable news. Get involved in something. Start a new hobby. Join an organization. Volunteer. Have a few irons in the fire before you sail off into the sunset.

[00:05:37] Good planning dictates that you get your affairs in order before you retire. Maybe you need to downsize and move out of that two-story house. Do you really need all that space? How well are you going to climb stairs as you age? Another consideration is your proximity to healthcare. If you're more than 45 minutes from a major metropolitan area, you should move. You'll be seeing doctors more frequently.

[00:06:05] Plus, if you have a heart attack or other major medical emergency, you need to be near top-notch facilities. Conclusion. Like marriage and having children, retirement is a major life change. You may not have time to prepare for some other life changes, but you've got all the time in the world to prepare for retirement. Create a retirement plan that not only pays the bills, but also nurtures your mind and spirit.

[00:06:38] You just listened to the post titled, Five Signs You Are Not Ready for Retirement, by Mike Ballou of EggStack.com. And I'll be right back with my commentary. You know what's funny? We'll hit the gym, eat clean, track our sleep, then slam coffee all day to function. My stomach's sensitive to caffeine, so I've had to stop drinking coffee. But that's why Ultra Pouches caught my eye. Completely nicotine-free and caffeine-free. Ultra partnered with neuroscientists

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[00:07:36] New customers can use code OFD to get 15% off at takeultra.com. That's takeultra.com for 15% off with code OFD. After you purchase, they will ask you where you heard about them. Please support our show and tell them our show sent you. This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together

[00:08:04] to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. Thank you to Mike. This one is a bit of tough love, but I think that's kind of the point. A few of these are the classic money ones we all know deep down,

[00:08:34] paying off the mortgage, clearing personal debt, actually having enough saved, that sort of stuff. But the one that stuck with me most was actually the last one about inadequate planning, and specifically the part that has nothing to do with money. He makes the point that if you retire with no hobbies and no social network, you're not really ready, no matter how big the nest egg is. And I thought that was a great reminder that retirement

[00:09:02] isn't just a financial finish line, it's a whole life change. I've heard before that a lot of people struggle after they retire, not because of the money, but because their sense of purpose and their daily structure kind of disappears overnight. So these other interests, a hobby, a group, something to volunteer with, seem just as important as the savings account. So it's not just asking, can I afford to retire?

[00:09:31] But what am I actually retiring to? Something worth thinking about, whether that day is far off, right around the corner, or if you're already there. But that should do it for today. Have a great rest of your day and week. Keep planning ahead, and I'll see you tomorrow, where your optimal life awaits.