Should You Set a Retirement Date?
If you’re planning for your future, setting an actual date for your retirement may help.
Unless you’re at the very tail end of your career, you probably don’t know precisely when you will retire. This is true for people in many professions, of course, but it can be especially true for veterinarians, who often rely on the sale of their practice as a major portion of their retirement income.
If you’re within 5 to 10 years of retirement, though, it may be worth it for you to consider setting an actual date for retirement. You don’t need to retire on that exact date, but setting a specific day in a specific month in a specific year can give you the push you’ll need to save and invest for your future.
As with all future planning, having some sort of idea of what you’re trying to accomplish will lead to a more fluid saving and investing strategy. Many people think it’s enough to start really saving when they are closer to retirement, but keeping the retirement date vague means keeping the goal of ramping up your investments vague. Consider also that when you are between 50 and 60 years of age, you have some larger-than-normal expenses. This may include subsidizing a child’s college education or helping a dependent with a first-time mortgage.
Say you’re in your early 40s. Your retirement date seems pretty far off and, therefore, less of an immediate savings concern. You might think you have plenty of time, but maybe the right time to start is right now in your 40s.
In your 30s, you may still be paying off veterinary school debt, establishing plans to purchase your own practice, or looking into buying a house. Surely now, with your income not yet at its peak and your expenses very high, isn’t the right time to save for an indeterminate period that’s more than three decades away.
Pick a Date, Any Date
I’m not sure a single person in the history of the world has chosen a specific retirement date in their 30s and then actually retired on that date. Picking a date to retire doesn’t mean you have to stick to it. The idea is to have a specific goal in mind because doing so will make it much easier to establish savings goals.
Knowing your retirement date, and then determining your savings goal, allows you to figure out exactly what you’ll need to set aside each month to be able to retire comfortably. In other words, setting your date allows you to picture very specifically what retiring then should mean for your investing goals now.