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Don’t Just Dream of Retiring – Plan for the Retirement of Your Dreams

Don’t Just Dream of Retiring – Plan for the Retirement of Your Dreams

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Raise your hand if you’re ready to stop working and retire.

That’s a lot of hands!

Now, how many of us are ready for retirement – – to live the way we want after we retire?

An overarching topic of the White House Conference on Aging was helping us to be financially ready to face our retirement years.

The face of aging is changing – we are living longer, we are healthier as we age and we are requiring more money to live longer than many of us have saved.

Social Security was never designed to be our full retirement income. It was created to be one source of income during retirement but a supplement only.

We need other financial sources to fully meet our financial needs as we age.

Are You Ready for Retirement?

The federal government has created resources for all of us to use, beginning as young adults, to help us determine how much money we may need, how to save money, and how to make the money we have set aside for retirement last longer.

Too few of us are taking advantage of the wealth of free information available, though it can mean the difference between living comfortably and struggling to afford even food as we age in place.

The government reports that, for people who are currently 65, 1 in 3 will live to 90 years and 1 in 7 will live to 95 years.

Will you be ready?

Taking the Mystery from Retirement Planning

Planning for every possible financial need will help all of us be as prepared as we can be for the years ahead. Many of us need help to plan effectively.

There is a publication, “Taking the Mystery Out of Retirement Planning,” that can be downloaded for free or requested in print from the US Department of Labor, Employee Benefits Security Administration (EBSA).

The current state of retirement is nothing like what previous generations experienced. Often they worked at one place throughout their careers and automatically retired at age 65 with a full pension and, if they were lucky, a gold watch.

Most of us do not have a guaranteed pension. If we want money for retirement, it will be up to us to set that money aside and make plans now for our personal needs.

There are a variety of ways to make the dream of retirement a reality, including opting into a 401K or other retirement account, especially when your employer matches your contribution. You will be able to watch your money grow with a little extra benefit from your employer.

The earlier we can get into this type of program, the better for our financial future.

More of Us Planning for Retirement

Perhaps we are starting to get the message, because it is estimated that 44% of us have tried to calculate how much money we need to save for retirement, according to the Employee Benefit Research Institute.

Using a calculator and actually doing the planning and saving are two different things, however. The “Taking the Mystery Out…” publication will help you plan for your financial future with handy worksheets and advice to guide you and your seniors with practical solutions to get you on the right path.

One worksheet, “Today’s Money”, instructs you to gather together in one place all the information about money and assets that you currently have. Perhaps there are financial accounts, home equity, IRA, collectibles and other valuables that you possess that you didn’t realize would add up as fast as they did or show you how much more you will need.

Bringing your financial information together and storing it in one place will be useful.

Use Tools to Plan Financial Readiness

Using another worksheet “Your Money – 10 Years From Today” will help you estimate how much these assets might grow in the future or how you can use it to grow more quickly moving it to another option. Being diversified could help you manage in the future.

These are just a few of the worksheets you will get in this publication to help you plan. Deciding if you need to change your budget, decrease your spending or diversify further will help you make the most of your assets for retirement.

Many of use could use help getting control over our current spending and planning for future spending as well as how much more savings we will need so we don’t come up short in the future.

When to Start Taking Social Security Benefits

This is a question we hear all the time.

Should we wait for our full retirement age or start taking our benefits when we turn 62? Or should we wait even longer until, even until we are 70?

Do you know what your or your senior loved one’s full retirement age is under Social Security?

Did you know it depends on the year of birth? If you were born 1960 or later, your full retirement age is 67 but if you were born 1943-1954 your full retirement age is 66 but born 1937 or earlier your full retirement age is 65. No one has a full retirement age of 62.

You can’t begin to draw social security benefits until you turn 62 but the amount you will receive is partially dependent upon your full retirement age. If you were born between 1943 and 1954 and take benefits early (at age 62) you will receive 75 % of your benefits.

Waiting Pays

If you wait until full retirement you will receive 100% of your benefits but if you wait until you turn 70 you will receive 132% of your benefits. These percentages are prorated if you take them at other ages such as 63 or 68.

Can you find a way to defer taking your benefits or do you need the money right now?

Will you prefer to potentially earn fewer benefits longer or larger benefits for a shorter amount of time depending on your life expectancy?

Continuing to work and draw on your Social Security benefits is allowed, but some earnings man be withheld depending on your age and the amount you earn at your job. Once you reach full retirement age there is no limit to your earnings and benefits are no longer withheld.

You have constant access to your Social Security statement, are able to update your information such as your address and manage your benefits via It can tell you your current benefits, future benefits if you are still working and allow you to change your direct deposit if you are earning benefits.

There is also a retirement estimator on the site you can use to check your benefit earnings. There is a calculator to help you estimate your life expectancy to help you plan for the time you can potentially need income.

Of course, you can also apply online at this site to begin collecting your benefits.

Retirement Tips

One consideration during retirement planning is that fact that almost 20% of income spent in retirement will be on healthcare. It will be important to factor in your health status and medical needs into your plan. The expense planning worksheets will help you focus on your future spending and how much you will need to plan for anticipated monthly expenses.

Every person is different and situations will vary depending on a variety of factors, including health status, debt, income and spending habits.

A rule of thumb is that you should plan to have 80-90% of your pre-retirement income during retirement to meet your expenses. As with other rules of thumb, though, it’s better to plan for your own situation.

When you have prepared for your financial future it will be important to protect your nest egg. Be aware of the potential scams and criminals who want to separate from your hard earned money. Take the necessary precautions and learn how to prevent being a victim of Elder financial abuse.

Retirement should be time well lived, enjoying new opportunities, sharing memories with family and friends and reaching for your dreams not time spent worrying about making ends meet.

Do more than dream of retiring, plan to reach the retirement of your dreams!

We'd love to hear your thoughts!

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