When Can I Afford To Retire?
If you are concerned about being able to retire, you are not alone. Many Americans worry about whether their retirement savings will be enough to live comfortably. In fact, when Americans think about retirement, the top concern for many is a fear of running out of money — which they fear even more than death.(1)
The decision to retire is a very personal one that depends on a number of important factors, such as your age, financial circumstances, health, and family situation. You also need to know whether you are eligible to collect a retirement benefit from your pension or sponsored retirement plan. Be aware that many traditional pension plans have both age and service requirements you must meet before you can start collecting a retirement benefit. If you have questions about your eligibility, be sure to speak with us about your specific circumstances.
GET AHEAD TODAY
If you are evaluating when to retire, take time today to address a few important steps and determine whether you are on track financially. While we can help you explore your personal situation in greater detail, you also can get ahead by starting to brainstorm your various needs and goals.
Know Your Unique Needs
Today’s retirement culture demands that retirees develop personalized retirement strategies that reflect their unique financial life. From using online calculators for estimating withdrawals to creating a retirement strategy with us as your financial advisors, you can approach retirement strategizing in many ways. As you look ahead, you will need to understand how various factors such as life expectancy, wealth, income needs, risk, and market environment affect your calculations. With these details in place, we can develop a strategy designed to balance your current cash flow while preserving your long-term income needs.
If you have run the numbers and think you may have a retirement-income shortfall, do not panic. Several strategies can help you increase your potential retirement income or reduce your expenses.
Know How to Address Any Retirement Gaps
- Increasing your savings rate may allow you to make up your retirement shortfall. Contribute as much as you can to tax-advantaged retirement plans and consider opening a Roth IRA. If you are 50 or older, use catch-up provisions to boost your retirement contributions.
- Delaying retirement can help you buy time. By working longer and adding to your savings, you will have more time to grow your assets, increase Social Security benefits (if you are younger than 70 and qualify to receive these funds in your state), and shorten the amount of time your savings must last.
- Downsizing your home and living expenses can help you decrease the income you will need in retirement. Many retirees are empty nesters who can reduce their expenses by moving into smaller homes.
- Working during retirement can create extra income while keeping you active and doing something you love. Many retire but continue working part time. Senior administrators become consultants and advisors. Other retirees pursue passions for gardening, lecturing, or writing. Keep in mind, though, that working while collecting payments may affect your Social Security benefits if you are younger than your full retirement age.
We can take a look at your overall circumstances and help you design a strategy with the goal of maximizing your retirement income. We will be able to help you design strategies to address any gaps or additional planning challenges in your Social Security or pension benefits. With our support, you also will be able to develop tactics that help balance the need for growth against your risk appetite, time horizon, and future goals.
SOURCE:
(1) “What Happens if We All Run Out of Money for Retirement?” U.S. News and World Report. https://money.usnews.com/money/retirement/articles/2018-05-30/what-happens-if-we-all-run-out-of-money-for-retirement [Accessed March 26, 2019]