The answer to the question isn’t as obvious as it may seem. We aren’t talking about what you will be doing when you retire. We’re talking about how you are planning to pay for it.
As millions of Americans age and get closer to that golden retirement age of 65, they may be getting a little bit nervous about how far their savings will carry them. Americans are living longer than ever, the cost of living is higher than it’s ever been and, in the current economy, many have not saved as much as they would’ve liked.
So as you find yourself advancing toward retirement, hoping for a second act where you can just enjoy doing everything you like – or nothing at all – you’ve got to ask yourself this question: Are you ready to retire?
Consider these issues when trying to determine if you are financially prepared for the retirement you are dreaming about:
1. Account for rising health costs: While it would be nice to think we will all live out our retirement years without incurring any extra healthcare costs, it’s unrealistic. When you’re analyzing how much money you will need to have, keep in mind that there will likely be unexpected health expenses.
2. Think about the lifestyle you want to live: For many, retirement age is about doing the things that you’ve always wanted to do but couldn’t — because of other obligations. With the extra free time, you will have the opportunity to pursue your passions. Perhaps you want to travel the world, retire on a beachfront property, spoil your grandchildren or just sit around the house and relax. Plane tickets, greens fees and retirement homes are expensive. Whatever you plan to do, you must account for that.
3. Take a look at your assets: Assess how much income you have now, how much you’ve saved and how much you have in your retirement accounts. In addition, take a look at your hidden assets. Perhaps there are some valuables around the house that can be sold or perhaps you can downsize your home to beef up your retirement coffers.
4. Determine if you still want to work: Many of us have developed skills that can become a viable source of income during retirement years. It could be giving piano lessons, being a chess coach, writing a blog or a book, or any one of many other hobbies. Make a list of your hobbies which can be morphed into money-making opportunities.
5. Do the math early: There are retirement calculators and legal services which can help you assess your savings/needs ratio. The earlier you do this, the better. You want to make sure you can establish a realistic savings goal. According to figures from the Employee Benefit Research Institute, only 54 percent of Americans have considered these retirement calculations by age 55, and only 36 percent of people in this age group have saved more than $10,000.
The New Jersey estate planning attorneys at Posternock Apell, PC have over 120 years of combined experience. If you’re wondering about your assets as you approach retirement, contact the estate planning lawyers at Posternock Apell, PC today.