5 Important Steps You Need to Take 1. Figure
out how much you will need to live on.
Is the
lifestyle you want possible? Before you take the plunge do some math first. Start by making a list of all of your expenses,
including entertainment, emergency funds etc. Prepare two budgets. The first budget should be your current expenses.The
second will be an estimated budget after retirement. Plan on needing approximately 60-70% of what you are currently
living on while working. If, after you do this exercise you discover that you have enough money to cover your expenses then
it’s a go! Recently we did the math and discovered that we will have to wait another year. It was disappointing, but
better to know now. (There are a lot of budgeting software prodoucts to help you with this process) 2. Work on your plan with your spouse or partner.
A
lot of planning means communication and preparation. Discuss what your new lives, activities and schedules will entail. Agree
on budgets, household chores, and the new roles you will be taking on now. That will alleviate those kind of conflicts later.
Discussing these issues can be uncomfortable if you let them, so go in with an open mind. Be ready to make compromises A big
part of this discussion involves agreeing on your future roles as well as managing your financial plan. Realize that roles
may shift considerably during this phase of life and talk about how you will handle these changes. 3. Work on your financial and life plan. What kind of costs will you encounter to make this
retirement lifestyle feasible? (This list may include health care insurance) Can you bear the loss of a stable income you
currently have? Can you live within the new budget you‘ve made? Do you have an emergency fund to draw from if needed?
Has the drop in the economy (Your 401K or Pension Plan) affected your ability to make this lifestyle change, or can you
ride it out without having to take principal from those sources etc? Do you have debt? If you are in any significant debt,
make sure you reduce or completely eliminate that debt before retiring. 4. Build other avenues of income if you need them. Most of us will probably need to have another
source of income besides a pension, savings or social security if you want to participate in travel and other leisure activities.
If you haven’t already done so, start building additional cash flow from a business you would enjoy and can do from
home or part time. This could include consulting, a home based business, starting up that idea you’ve dreamed of for
years. Financial independence doesn’t necessarily mean total freedom from work. Instead, it means freedom to do what
you’d like to do. 5. Restructure your life.
Make these years to come productive. This new lifestyle, if done correctly can be even more rewarding and fruitful than
when you were still employed. Do you have interests and goals you’ve always wanted to begin or are already doing that
will keep you busy and productive? OTHER DETERMINING FACTORS FOR
A SUCCESSFUL RETIREMENT Divorce can also be a determining factor
in your financial worth. It's a known fact that people who stay together through thick and thin, and work out their problems
are more financially solvent than those who don't. Married people are also healthier and live longer than singles do. If you aren't already exercising, get out there. Even short amounts of "cardio" time....10
minutes a couple of times a day, are very healthy. So, take up walking, swimming, golf, tennis...anything that will get back,
and keep muscles toned and your heart pumping. Yes, for some it will be painful when they start, but start you must. After
all, what good is it to retire if you aren't healthy enough to enjoy your life?
ASSESSING YOUR RETIREMENT The retirement lifestyle you want is a choice dictated by several things. Your first step will be to assess your
personal retirement needs. While travel may be
important to one person, it may not be to another. Local activities with long-time friends and family may be first on your
list instead. Climate may be a big factor, as well as the proximity to medical facilities. Deciding where to retire and the
lifestyle you want to live means doing some planning and making decisions that many of us often put off far too long because
we don't want to confront aging. Others who will only have their social security check to live on may think there is nothing
to decide. Not true. There are always choices. efore you plunge head-first into retirement, recognize
that some of your choices will depend on wants, others will Begin by sitting down with your partner and making
a budget to determine if it is time to retire yet.
Your budget should start with your hard costs each month.
One column will be your income. Include social security, income from rental properties, interest on savings, IRAs, stocks
etc. Then make a list of your hard-cost expenses. Those would be things like utilities, car payments, HOA fees, taxes, mortgage
or rent, health care insurance, etc. Will you be retiring where you currently live or will you relocate? This
is an important question and one factor in making that decision could be how your State's taxes impact where your retirement income comes from. Some states
collect taxes on retirement income from social security etc and others don't. It is a consideration for many retirees especially
if they are going to be on a tight budget. What
is left over will determine what you can spend on your "want" list. Based on that figure, some of the things you
enjoyed while still working (like golf or dining out regularly for example) may not be within your means. If that's the case,
you have a decision to make. Will you give up your hobby or leisure activity? Or are you willing to work part time to continue
to enjoy those pleasures? Make another list of
"wants." Activities you would like to take part in, hobbies you enjoy, family and friends etc. If some items on
your wish list are expensive, or the climate isn't compatible where you currently reside, is there another part of the country
you should consider for retirement? Have you always wanted to live in an artistic community? Would you consider retiring in another country? . LATEST RETIREMENT TRENDS for 2011 A HEALTHY MIND AND BODY Haven't thought about hobbies and leisure when planning for your retirement lifestyle?
Find out what Science is saying about your retirement years and hobbies here... How important are hobbies, and what's available for active seniors and not so active seniors?
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 Staying active with sports or activities you enjoy and are
healthy enough to enjoy, keeping yourself involved in your community, national and world events and continuing to be passionate
about life and your relationships is key to a great retirement lifestyle
. . .
Retirement Scenario One... Living on a $500,000 Nest Egg Simple Pleasures
Annual income: $70,000
$30,000 from Social Security
$20,000 from a pension
$20,000 from personal
savings$70,000
$30,000 from Social Security
$20,000 from a pension
$20,000 from personal savings About
$45,000 will go to pay for basics, such as food, housing, health care and taxes, according to the Aon study. But if you don’t
have retiree health benefits from your former employer, expect to pay an extra $5,000 a year or so for Medicare premiums
and supplemental medigap coverage. The study budgets about $225 a month for entertainment. Skip the weekly Saturday
night at the multiplex and join Netflix instead. Lifestyle: With a cushion of about $20,000 a year,
you can buy a nice, used RV and tour the country. And focus on staying healthy and active because your budget doesn’t
include long-term-care insurance premiums. If you need cash in the future, you could take out a reverse mortgage on your home.
Just make sure you know exactly what you can expect before you sign on the dotted line. Lifestyle 2: Average Lifestyle 31,500 Social Security (two people) 10,800
Part time Home Business income 12,000 One income property $54,300 a year total income This will
allow you a cushion of less than $10,000/year for the extras in this lifestyle. If you have another home that is paid in full
so you don't have an additional house/apartment expense this puts you in a better position. It will allow for $250 a month
in entertainment or leisure expenses. Choose hobbies that don't come with high monthly costs, dine out infrequently and you'll
be fine. You might even have a little left over at the end of the year if you're frugal.
WORST STATES TO RETIRE TO in 2012 The
following is a list of the worst states to retire to due to the high cost of living and taxes. Number one being the worst. 1. Conneticut 2. Illinois 3.
Rhode Island 4. Vermont 5. Massachusetts 6. New Jersey 7. Minnesota 8. New York 9. Maine 10 Wisconsin
Don’t Be
a Repeat Retiree by Robert J. Reby If you’re
looking forward to retiring and want to do it only once, or if you’re retired and want to stay that way, here are a
few tips that can help. • Carefully assess your needs and goals, and periodically reassess
them.
One of the first tasks a financial advisor undertakes with new clients is creating detailed lists of their
expenses and goals. To an advisor, detailing clients’ objectives is critical, because they are indicators of future
expenses. If you haven’t created such a list, do so. Underestimating retirement expenses
— whether they be for everyday living or for travel and other retirement plans — is a mistake many people make,
and one reason why they return to work. Then, continue to assess and monitor your costs
and goals even through retirement. Note any discrepancies between your anticipated and actual expenses and lifestyle, and
address them. The sooner you tackle such differences, the better chance you have of retiring once. •
Examine and evaluate your retirement income.
Many people take great pains to estimate their retirement
expenses only to miscalculate their retirement income. Retirement income can come from many sources — pensions, investments,
Social Security, and so on. So, again, your best bet is to make a list. One mistake couples make
is to assume they will have their combined retirement incomes to live on. Unfortunately, if one spouse dies, the other may
no longer receive income from a spouse’s pension, or it may be reduced. Yet, the surviving spouse will still have many
of the same expenses. A house and a car cost as much for one as for two. So, determine if each of you can live on your own
retirement benefits. Another common mistake is to overestimate investment income. Many investors
anticipate unrealistic yields, and they forget to factor in fees, taxes, inflation, and the ups and downs of the market. As
a result, the total return on their investments is far less than they expect and they have less retirement income. When you’re ready to tap into your retirement funds, consider the tax implications of withdrawals from each
income source. Many investors automatically use their IRAs when they retire. Tapping other investments or Social Security,
however, can result in a lower tax bill. • Put your money to work, so you don’t
have to.
Investing is critical to retiring once. First, it is the only way you can hope to keep up with inflation
and maintain your purchasing power. If inflation is 5 percent per year and you put your money in a savings account earning
2 percent, you will lose 3 percent of your purchasing power every year. Over 20 years — which could be the length of
your retirement alone — that adds up. Invest your money wisely and you’re likely to stay ahead of inflation. Second, investing is the best way to build and maintain your assets. For many people, living off the interest that
their assets generate is the best retirement strategy. Invest for the long term and your holdings will increase in value.
This, combined with the effects of compound interest, lets you accumulate assets in your pre-retirement years, and maintain
them to generate income after you retire. • Diversify. Diversify. Diversify.
If you’re hesitant to invest after recent stock market tumbles, remember that the time to buy is when prices are low.
Remember, too, that the investors who have suffered the most have been those who did not diversify their assets and had too
much of their portfolio in one company or one industry sector. Those who have spread their investments
among industries, among small, medium, and large companies, and among domestic, international and global investments, are
weathering the storm. They, too, have losses, but because they’re diversified, their losses are offset by gains in other
areas. For more information on your retirement and retiring once, check out Retire
without Worry. Robert J. Reby & Company, Inc.
83 Wooster Heights Road
Danbury,
CT 06810
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