Retirement: Wants and Options

Written By: William Zoellner | Issue: 2015/03 - March

Will I have enough money in retirement? It’s a question more and more Americans are asking.

Baby boomers in particular wonder if they’ll be able to live comfortably and securely when they leave the workaday world.

The good news is that you may be able to retire with confidence and enough assets — if you get organized. That means thinking about what you want retirement to be, reviewing your current investments and benefits, and taking maximum advantage of some investment vehicles designed to provide retirement income.

Setting retirement goals is not just about dollars and sense. It’s also about drawing on your values and hopes to create a satisfying life. For some, that may mean continuing to work past age 65, or even starting a new career. Others, of course, may be ready to stop laboring and start relaxing, volunteering, traveling, or pursuing a pastime.

Because each individual’s idea of the perfect retirement is different, everybody will have different financial needs.

Try to determine what yours will be based on your vision of being retired. Don’t accept the conventional wisdom that says all of us will require 60 to 80% of our income when we stop working. Instead, try to estimate a budget for your specific vision of retirement.

Start by noting what you spend on the basics — food, shelter, clothing, health care, and transportation. Include expenses for raising children and the mortgage, if it still needs to be paid off. Also, if you keep working, account for any income you anticipate. Add costs for travel, hobbies, entertaining, donations, and a second home, if that’s something you’ve worked toward attaining.

As you look ahead, be sure to consider that, realistically, you may be retired for a long time, and your finances need to reflect that fact. Once you have a sense of your financial needs, look at the benefits you’re confident you’ll receive. Make sure you know what you’ll get from your employer.

Also, review your savings and investments. Then check on your Social Security benefits. Once a year, Social Security sends a statement of these. If you don’t have one, then use the benefit calculators at the Social Security Web site —www.ssa.gov.

When you know your goals and estimated expenses and income, you can create a written retirement plan that covers investments held in retirement and nonretirement accounts. As you do, it’s a good idea to look at several sources of income that you can use to save and invest.

Ultimately, proper planning may help you get the retirement you desire, if you know what you want and what your options are — and pursue both with resolve and clarity.