by Chinkee Tan
One of the best ways to gauge if you are indeed wealthy is to confirm with yourself whether you now have ample resources to consider retirement.
All of us want to retire and enjoy life. But before we actually do, we need to ask ourselves the following questions to determine whether or not we could really afford it.
Have you chosen your retirement lifestyle?
Do you have dreams to travel? Start a mission work?
Fulfill your bucket list? Or just simply live in your farm for the rest of your life?
You can choose the lifestyle that you want. The cost of your lifestyle choice will dictate how much money you would need in order to sustain your recurring expenses.
Can your passive income maintain your lifestyle?
The easiest way to figure out how well you’re doing with the money you earned is to have a quiet moment with yourself and imagine that you have recently resigned and today is your last day of work. It would not take you long to determine if your passive income can support you for the rest of your life. Your own purse will reveal if you are on the right track with your financial planning.
In reality, the moment you stop working, you stop earning but you don’t stop spending.
Do you still have outstanding loans?
Using your retirement fund to pay off your current outstanding loan is a pitiful scenario. Imagine getting stripped off your savings on your old age. This is the reason why I advise many of my personal friends and clients to get out and stay out of debt while they are still young and strong.
Will you still benefit from regular and reliable health services?
Health care will be one of the major issues in your advanced years. Make sure that you have enough medical coverage for your health concerns. One major illness can immediately wipe out all that you have worked for your entire life.
Is your retirement fund secure?
No one can predict what the future might bring. Everybody needs protection against worst-case scenarios like floods, fire, vehicular accidents, theft and other calamities.
You do not want to use your remaining retirement fund to start all over again, especially when you don’t have the time, the strength, and the resources to rebuild.
Are you self-assured of your family’s future?
As a parent, it is natural to think and worry about your family’s future. See if you have been saving up well because you have to secure the following:
Income replacement fund states that even if the breadwinner passes away, the bereaved family will still receive an adequate monthly income.
Inheritance fund – a substantial amount of money set aside for your children’s future.
Retirement fund – this affords you to become independent because you are able to save and set a consistent cash flow to provide for your needs.
THINK. REFLECT. APPLY.
If you stop working today, can you still afford to live the lifestyle that you want? Do you have enough passive income to sustain your daily expenses? Have you set aside enough protection income to secure your health and possessions? If not, what are you waiting for? Start planning and investing now for a worry-free retirement.
