10 Crucial Things to Consider If You Plan on Retiring in the Next 5 Years

November 24, 2020 · Retirement Life

Hiking boots and a map on a bench, symbolizing the journey to retirement. — Hiking boots and a map on a sunlit bench symbolize the exciting adventures awaiting your retirement.

Can you rely on other sources of income?

One of the major reasons that people work so hard to prepare for retirement is because deciding to forgo a stable income is a major step. When you don’t have a paycheck, all of your expenses come from your savings and investments.

It’s no secret that the COVID-19 crisis has put the brakes on certain income streams. A lot of future retirees with rental properties will suffer financial losses as their tenants are struggling to make ends meet after being laid off or losing their jobs. Pending retirees with investments such as bonds or stock dividends will have to deal with market instability. Therefore, if you have other sources of income, evaluate and determine how reliable and consistent they are in the months to come.

A woman consulting with a financial advisor in a professional office. — Two professionals review retirement plans on a tablet to ensure a secure and successful financial future.

Why it’s important

If your source of income is somewhat stable, even amid the coronavirus crisis, retiring earlier than planned would not require you to use some of your 401(k) money in case of a market downturn. If you know you can rely on your income streams, that could play into your decision to retire ahead of time.

Make sure you also see this post: Thinking of Retiring Early? These Real-Life Tips Can Help You Do Just That.