What will you do on the first day of retirement? It's a simple question that often throws soon-to-be retirees off guard. Not many people make the time to explicitly plan out such a wonderful day of their lives. That's a shame, because there are countless benefits to having the first day of your golden years mapped out. Here's why you should envision your first day of retirement:
Thinking more about retirement will give you additional motivation to save. One of the biggest reasons saving is difficult is because it's difficult to visualize the benefits of delayed gratification. Having something concrete to look forward to in retirement will motivate you to put more dollars to work early instead of spending the extra cash. And compound interest will help disciplined investors to better afford their desired retirement activities.
Figure out whether you truly want to retire. Many people want to get rid of many of the pressures of working full time. But giving up your 9-to-5 job isn't always in your best interest. Can you think of ways to spend your time once you stop going to work on a consistent basis? If the answer doesn't immediately come to mind, you may have to rethink your retirement plans. The decision to retire shouldn't solely be based on your financial situation.
Refine your budget. As you figure out more details about how you want to spend your time in retirement, you will gain more insight on the expenses your retirement income will need to cover. How often do you believe you'll go out to eat? Will you burn some cash with your hobbies? If you can come up with an accurate picture of your retirement, there will be fewer surprises and you will have a better chance of kicking back and relaxing.
Realize that retirement is only the beginning of another lifestyle. Most people spend so many years saving and investing for retirement that they forget there could be decades of life after handing in their resignation letter. By planning for how you'll spend your first day, it will help you remember that the first day of retirement is not the end goal but the beginning of a new phase of life. The good news is that those who sufficiently plan have a very good chance of having a fulfilling and happy retirement.
Planning for the big day is fun. There are no more bosses to report to, no ridiculously wasteful meetings to attend, and no need to spend lunch hours complaining about coworkers who get on your nerves. The first day of retirement is totally your time, and you can spend it as you please.
David Ning runs MoneyNing, a personal finance site that shares money moves you can make to significantly increase your chances of having a comfortable retirement. He likes to share simple changes that anyone can make, such as picking the best online savings account and figuring out whether a 0 percent balance transfer credit card makes sense.