By David Ning
Many workers face a dilemma very close to their planned retirement date. They want to keep working and saving to be sure they won't ever run out of money, but work frustrations and a desire to do other things keep reminding them they can probably get by quitting. Here are some things you should do as you get close to the retirement finish line.
1. Speak Up at Work
Don't be offensive and disrespectful, but start saying what everyone is thinking about in meetings and afraid to say. After all, the consequences of possibly alternating your career trajectory don't matter to you much anymore, and voicing your concerns could lead to changes within the organization. By being a voice of reason, you will likely feel less frustrated at work. Plus, you'll probably find that people from all levels of the organization will start appreciating and respecting you more for the points you bring up.
2. Get Big, One-Time Expenses Out of the Way
You should go on that lifelong dream vacation, fix the nagging house repair you've been putting off and even upgrade aging cars before you retire. If an expense costs more than you anticipate, you can always compensate by working another few months to pay for it. Tackling large costs while you are working is a much better strategy than taking a big chunk of money from your nest egg that can't be easily replaced once you leave your job.
3. Max Out Your Retirement Accounts
Many people claim they don't earn enough to contribute the maximum amount to their retirement accounts, but the year leading up to retirement is the perfect time to stash away as much cash as you can. As you approach retirement, you should put a significant percentage of your paycheck away for retirement so that the stash can grow tax-deferred. Or you could put the money in a Roth account and pay the tax now so that you can take tax-free withdrawals later on in retirement.
4. Test-Drive Your Budget
Use this time to start trying out your retirement spending plan. Can you actually live on the proposed monthly budget? Have you missed a few infrequent but inevitable expenses? By trying out your budget, you will feel more confident about your finances. And if you find that you can't get by on your allotted monthly income, there's still time to alter your original plan and retire a bit later.
5. Really Start Exercising
Many stressed-out people have low energy and live an unhealthy life. Now is the time to prioritize your health by making the effort to start exercising. It will be tough at the beginning, but you'll feel great once your body adapts to the new routine. You'll have richer conversations because your energy levels will increase, and you'll feel younger and more alive than ever.
6. Simplify Your Financial Picture
Start to consolidate your financial accounts and consider simplifying your investments. Just remember to consider the tax consequences before you sell investments that have large capital gains. This way, you won't need to spend as much time managing specific investments in retirement, and it will help cut down on the chances you will make a mistake that hurts your finances down the road.
7. Explore Part-Time Retirement
Talk to your boss and see if there are opportunities to work part-time as a consultant. By working less, your stress level will go way down, helping you hang on to your job for a few more years. If that's not an option, ask the management to consider letting you work from home at least part of the time. It's amazing just how much stress a daily commute can add to our lives, and how eliminating it can help you stay more motivated to work. You may even want to start a small business on the side. While not all businesses are successful, there's certainly the hope that a side gig will start making you enough money to help you retire a little sooner or finance a better lifestyle.
David Ning is the founder of MoneyNing.com.
By David Ning