The Week (US)

Are you ready for retirement?

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Everyone knows deciding when to retire “is about more than having enough money,” said Michelle Singletary in The Washington Post. There are all sorts of considerat­ions, including your physical health, your future plans for travel or hobbies, and the “mental upheaval” of having so much downtime after decades of work. But you also can’t discount the money factor: Unless you’re “financiall­y ready” to stop working and have developed “a clear monthly financial plan,” experts say, you’re unlikely to be successful. Those without a plan often quickly have to seek a job “to make ends meet.” That’s particular­ly problemati­c if you’re physically unable to work or can’t find a decent job, said Robert Powell in USA Today. Only half of seniors who say they want to continue working are able to, according to the Employee Benefit Research Institute. The rest exit the workforce ahead of schedule because of a job loss, disability, or health care–related issues.

How do you know if you’re financiall­y ready to retire? asked Erik Carter in Forbes.com. Begin by calculatin­g how much income you require to meet your basic needs. Rather than “guestimati­ng” expenses, track the actual amounts over a few months. “Make any adjustment­s you foresee to your lifestyle (like downsizing or relocating) to create a retirement budget.” AARP’s website has a helpful calculator for estimating healthcare costs. Next, visit the Social Security Administra­tion’s website to run a projection on what you’ll receive, and consider whether you’ll have any other income, such as pensions or money from a rental home. Finally, total your retirement and investment accounts and multiply by 4 percent to determine how much you can safely withdraw each year. Don’t forget to consult an online calculator to figure out your state’s tax liabilitie­s. It’s health care that remains the wild card in any budget, said Alessandra Malito in MarketWatc­h.com. The average couple retiring in 2018 can expect to fork out more than $280,000 on health care as retirees. “That figure will continue to rise, too.”

If you aren’t ready to retire yet, making even some small adjustment­s can “make a big difference later,” said Rachel Hartman in USNews.com. Try to maximize your 401(k) contributi­ons, and make sure you are taking advantage of a company’s matching policy. If you’re over 50, you can contribute up to $24,500 this calendar year. Work quickly to eliminate debt, too. “Making payments on a car loan or credit card debt can use up valuable dollars that could otherwise be invested toward the future.” Perhaps most importantl­y, “set lifestyle goals” for your retirement. Which city do you see yourself residing in? What trips and hobbies will you pursue? Figure out “what you want your retirement to look like,” and start making it happen.

 ??  ?? The ultimate goal: A nest egg to match your dreams
The ultimate goal: A nest egg to match your dreams

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