Thinking About Retirement?

Most of us have grown up thinking that age 65 is when we’ll retire. In fact, there’s really no “right” time. Finances, health and emotions all play key roles in determining when retiring is right for you. Retiring means starting a new phase in your life – and every change has challenges. If you’re thinking about retiring, it’s time to consider what you’d like your life to look like. For some folks, it’s the work they do that makes life fulfilling. To other folks, being free to set their own schedule and pursue their own interests is a dream come true. Dare to dream: what will you do in your senior years?

Preparing for Retirement Emotionally

Although more is written about financial preparation, a fulfilling retirement depends upon emotional preparedness – even if you have the finances worked out, you may not be ready to retire. Test your emotional readiness by considering the following questions.

• When you think about retirement, what do you see yourself doing? What will make you happy?
• To what degree do you define yourself through your work? How will you fill the void left when you’re no longer working?
• Do you want to continue working during retirement? If so, part time at the same job, or are you interested in trying something new?
• Where do you want to live once you’re retired?
• Are there activities you want to build your retirement around? Travel? Hobbies? Volunteer activities? Learning more about an area of interest to you?
• If you’re married, do you and your spouse share a common retirement dream?

If you’re approaching 65 but find you aren’t emotionally ready to leave your job behind, it’s time to consider what you’d like your work life to look like. For some, that means working longer in their current job, either part time or full time. For others, it may mean a career change; in fact, 60% of seniors are starting “second act” careers. Postponing retirement has clear financial advantages – providing more years of income and fewer years of spending retirement funds. On the other hand, if you’re ready for a change and looking forward to free time to realize your dreams, it’s time to figure out whether you’re financially prepared.

How Much Do I Need to Save for Retirement?

Here are some questions to help you get started on your retirement budget.

• Housing: Is your mortgage paid off, or will it be by retirement? Do you plan to move to a smaller home? To a less (or more) expensive part of the country?
• Savings: Once retired, you'll no longer be making retirement plan contributions.
• Work-Related Expenses: You'll be able to reduce or eliminate expenses related to your job, such as commuting expenses and business clothing.
• Vehicles: You may be able to reduce the number of vehicles you own. One piece of advice to consider is to enter retirement with a paid-for new vehicle.
• Retirement Activities: Are you planning to travel extensively, develop your backyard garden or volunteer with local organizations? Those activities have very different impacts on your retirement budget. Will you entertain more or less? Eat out more or less? Give serious thought to your preferred retirement lifestyle and the income required to sustain that lifestyle.
• Protection Costs: Don't forget to budget for health insurance premiums, such as Medicare and "Medigap" premiums. If you retire before age 65, be certain to take into account how you will pay for healthcare expenses or health insurance premiums. You may decide to purchase long-term care insurance, which will require an ongoing premium commitment. Then there are life insurance, homeowners, and auto insurance premiums to take into account.
• Healthcare Costs: Even with the best of health insurance coverage, you should plan on having out-of-pocket costs for healthcare, dental, and vision services not fully paid for by insurance.
• Family Responsibilities: Are you currently responsible for the support of any family members? Will this responsibility continue after your retirement? Do you want to help pay for your grandchildren's college education?
• Your Dreams: Cost of travel, hobbies, and personal projects you dream of spending time on in retirement.

The next step is organizing your financial information. Download the “So You Are Thinking About Retirement” guide from the link at the end of this article and open page 12 for the Retirement Income Organizer. Enter as much detail as you can to build a quick estimate of your monthly expenses. Or, if you would like to test different scenarios or go into more detail, set an appointment for free access to our Retirement Analyzer software. We’ll guide you through the process and help you create reports showing how different retirement ages, different home expenses or different withdrawal strategies may affect income in retirement. We don’t charge for this service because we believe being well informed best prepares you for all the decisions you need to make to prepare for retirement. Of course, you can always choose one of the many software programs and checklists available in books and online.

Top 5 Financial Risks in Retirement

Here at Retirement Safety Zone, we pay attention to the risks you may face. We guide folks like you through the maze of potential solutions to focus on options that address the gaps and offer benefits that matter to you. If you’re ready for a deeper dive into how well prepared you are for retirement, consider how you’ll deal with these top retirement risks. Then, set a time with us to begin your journey to solutions.

1. Outliving Your Assets: The odds are that you’ll live a long time after retiring. That’s the good news . . . the bad news is that you’ll need sufficient assets to provide retirement income over a potentially long period of time. The alternative is to risk outliving your retirement income.
2. Inflation: With inflation, the cost of goods and services increase over a period of time, meaning that you’ll need more retirement income in order to pay for the same lifestyle.
3. Loss of a Spouse: With longer life expectancies and the tendency to marry men older than they are, women are more likely to face a dramatic decline in retirement income at a spouse’s death. But illness and accidents can create the same risk for married men.
4. Healthcare Expenses: While Medicare covers many healthcare expenses, retirees need to be prepared to pay for Medicare-related premiums, as well as expenses Medicare doesn’t cover. If you’re planning to retire prior to age 65, you’ll need a way to pay for healthcare expenses until you become eligible for Medicare.
5. Long-Term Care Expenses: While there are a variety of long term care services, ranging from care in the home to assisted living facilities to nursing homes, all of them are expensive. If you or a spouse need long term care, how will it impact your retirement income?

Strategy At A Glance

There’s no “right” time or way to retire. But being prepared emotionally and financially provides a solid foundation for whatever your dream retirement entails. Preparedness doesn’t just happen; it takes some effort and focus. We’re here to provide the resources and experience to guide you to a safer retirement.

Next Steps

Get started now on shoring up your retirement plans. Download the “So You Are Thinking about Retiring?” booklet below and begin filling in the questionnaires and worksheets. For support, resources and guidance on your journey, make an appointment with us. No pressure, no charge. Our goal is a more secure retirement for you and your family. If we do our job right, our income takes care of itself.

Retirement Analyzer Disclosure:
The information provided by these projections and calculators is for illustrative purposes only. Estimates included are based on information supplied by the client such as estimated Social Security benefits, pension benefits, projections of cost of living increases, inflation rates, and federal and state income tax rates. Current federal income tax tables are used in certain calculations. All of these are subject to change and will have an effect on the long range outcome shown in the analysis. Any interest rates are hypothetical and are not meant to represent any specific investment. Thomas Gold Solutions, LLC has done the due-diligence to maintain the accuracy of the information and calculations, but the assumptions do not encompass all situations. Thomas Gold Solutions, LLC does not make any guarantees on the outcome of any recommendations made based upon the above information. The projections or other information generated by this report regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.