It’s a fairly common practice for some people that before they make a major purchase, they do whatever they can to try things out first. Sometimes this is literally a “test drive,” as one would do before buying a new automobile. Some individuals might even try to rent a home in a new neighborhood before committing to move there and buy one.
This same “test drive” concept can even be applied to various types of life decisions as well. For example, some young couples choose to live together before deciding whether or not to get married. You can even do the same thing when it comes to decisions relating to your retirement.
Here is some retirement advice on how to take a test drive for your retirement.
What is a Retirement Test Drive? First of all, let’s be clear on what it is we are talking about. A retirement test drive is essentially a “dress rehearsal” or testing of what things will be like in retirement, based on the budget you’re likely to have at that time and various other aspects of your retirement lifestyle.
Testing Your Retirement Financial Status. Hopefully, if you’re close to retirement than you have a good idea of what your monthly retirement income will be. This will be the most important thing to test when doing a retirement test drive. Keep a detailed record of all your actual spending for a couple of months while doing the test drive, and see how this measures up against your expected monthly income during retirement.
Are you barely able to make your budget? Would a single unexpected expense throw your budget into disarray? Does the lifestyle at your retirement income levels seem too modest or difficult to maintain? Knowing the answer to these questions now, before you enter retirement and while you still have time to make changes to your retirement plan, can be invaluable.
Testing Your Desired Retirement Location. Are you thinking about changing your residence situation when you enter retirement? For some people, this might mean downsizing from a single family home into a much smaller home or even a condominium. For others, retirement might mean moving to a different part of the country or even a different part of the world. Unfortunately, sometimes prospective retirees are simply assuming that they’ll enjoy a new retirement living situation, but don’t ever put those assumptions to the test.
If you’re thinking about making a change, try to spend a few weeks living in the new circumstances. For example, if you think you might like to retire to a vacation destination that you previously enjoyed, try to spend some time there during the off-season. You might find that the day-to-day experience of living there isn’t what you assumed it would be.
Hopefully, after taking a retirement test drive you’ll find that you’re on the right track, both financially and in terms of your retirement expectations. If you experience any challenges, we find that your assumptions don’t appear to be true, then now’s the time to make the appropriate adjustments.
Tags: retirement advice, retirement income, retirement planning
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on Tuesday, May 13th, 2014 at 12:42 pm and is filed under Planning.
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It’s a fairly common practice for some people that before they make a major purchase, they do whatever they can to try things out first. Sometimes this is literally a “test drive,” as one would do before buying a new automobile. Some individuals might even try to rent a home in a new neighborhood before committing to move there and buy one.
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