Tips for Retirement Planning
Retirement planning is always a hot topic. Whether you’re a Baby Boomer or a member of Generation X, retirement will be here before you know it. The earlier you plan, the better off you’ll be when you’re ready to say goodbye to your full-time career.
Will you be able to retire when you want? Will you have enough money to maintain your current lifestyle?
When you can positively answer these questions, you will be on your way to a confident, satisfying retirement.
When Can I Retire?
Social Security retirement benefits begin at age 62, but they are reduced. The age to get full Social Security benefits varies based on when you were born. If you were born between 1943 and 1954, it is 66. If you were born after 1960, it is 67. From 1955 to 1959, there is a sliding scale that hovers around 66 that you can see here.
While your Social Security benefits do not dictate when you can retire, you should consider them if you need them to support your lifestyle. The right retirement age is different for everyone, and it is based on many factors that include the way you want to live, how much you’ve saved, and your plans for your free time.
How Much Money Do I Need to Retire?
The amount of money you need to retire varies for every person, too. It all depends on what you want to do with your life after work. You may have 40 to 60 hours per week to fill, and new activities will cost money. Some expenses tend to go down – like commuting and dry cleaning – but others, such as entertainment and travel, will take their place. Each retiree should evaluate his or her expenses to estimate what will go up, what will go down, and what will remain the same.
Work backward to figure out how much you will need, accounting for all of the expenses above and then giving yourself a conservative cushion for unknowns and inflation. It’s a good idea to have a cash reserve, too, for emergency medical expenses.
Remember to plan for a long life! You certainly don’t want to move in with relatives at 90 because you’ve run out of money.
Six Common Retirement Regrets and Tips to Combat Them
- Not Saving Enough – Many people have grand ideas for retirement but fail to plan accordingly. Save enough to meet your needs, but also prepare for “what-ifs” like having to go into a long-term care facility or losing your spouse. The earlier you begin to save, the easier it will be to reach your goals.
- Not Paying Down Debts – While you have the extra income, get rid of your credit card debt and pay off other loans. Those monthly payments add up, and you won’t want them hanging around when your income is fixed.
- Retiring Too Soon, or Too Late – No can tell you the right time to retire. Think about what you want to do with your free time; will your age impact your plans? Hiking to Chichén Itzá may be easier in your 60s than 70s. Regardless of the age you choose, just make sure that you know the rules for how much income you can get, and when – and how that income will be affected by taxes.
- Waiting Too Long to Downsize – Many retirees report that downsizing was the best thing that they ever did. Even if you don’t plan on moving into a smaller home, it’s a good idea to hand heirlooms down to the next generation to ensure that they stay in your family.
- Making an Impulsive Move – If you want to retire in a different part of the United States – or world – make sure that you spend an extended period visiting that place first. Many people assume that they want warmer weather, like in the Carolinas or Florida, and then realize that they hate the heat.
- Seeking Advice Too Late – The most crucial part of saving for retirement is starting early. To ensure that you have a solid plan in place, you may want to seek outside advice from a professional. Registered Investment Advisors (RIAs) can help you stay diversified, to combat ups and downs, and show you ways to save beyond your employer-sponsored 401(k).
Easing Your Retirement Concerns
It’s never too early – or late – to start planning. If you are worried that you won’t have enough, or you simply aren’t sure what age makes the most sense for you, help is out there. Professionals like RIAs can walk you through your unique situation and create a strategy that meets your needs. There’s no shame in seeking guidance – especially when it can lead to a successful, fulfilling retirement.
The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual. This information is not intended to be a substitute for individualized tax or investment advice. We suggest that you discuss your particular situation with a qualified tax or financial advisor.
As a Registered Investment Advisor (RIA), Partnership Wealth Management is committed to providing our clients with financial planning and wealth management services to help them make the most of their investments. At Partnership Wealth Management, we have a long history of working with the LGBT community. Among the many services we offer are financial planning and estate planning strategies for gay and lesbian couples. Financial planning is an important part of preparing for the future; contact us today to get started: www.partnershipwm.com.