Admit it. As much as you like to daydream about retirement and its perceived pleasures, you (and me) are also very nervous. We wonder if we will have enough things to do to avoid boredom. We are concerned that we won’t be able to survive on our retirement income. We’re unsure about where we should live when we retire. A retirement test drive help reassure us that our current plan is the correct one or signal us that a different plan is needed. So how do you safely conduct a retirement test drive?
1. When you hit your early ’60s, keep working to increase your Social Security retirement benefit (by 8-9% per year!)
2. Make a retirement spending budget and start living on it.
3. Stop or at least reduce your retirement plan contributions.
4. Use the money you are not contributing to your retirement plan as a “retirement lifestyle” fund, e.g., use it to travel, explore possible retirement destinations, enjoy your present hobbies or find new ones, etc. In other words, this is temporary “fun money” over and above your predicted retirement living budget.
5. Closely track and monitor the results, be realistic and learn from all of the above, and adjust your retirement plan accordingly.
We are working a modified version of this plan. I am still working but not has much. We are experimenting with condo living in a rural setting. I am trying new things – working with ponies in our non-profit activity, taking yoga, etc.
What do you think about this approach? Are you looking for ways to test drive your retirement?