Are you Retirement Ready?

My Story

I’m not proud to say this, but I was in my late thirties before I ever thought about the fact that people retire. It was after I started work with a large government agency. I literally remember saying to myself, “Oh, yeah. Granddad did not work.” It was like the light came on. I started thinking about the fact that he had to have income to pay for a place to live, food to eat, meds, gas for his car, etc. Before that, it was just something that I never thought about. It never crossed my mind

Retirement Scenarios

Since that time, I’ve heard and seen a number of retirement scenarios, talked to a number of people about retirement, and participated in the retirement process. I know people in their 70’s and 80’s who still work full time. Some just don’t want to retire- either because they just enjoy working and feel like they still have a lot to contribute; or they don’t know how to stop working; or because they can’t imagine not seeing their work family from day to day. One person I knew, couldn’t imagine not seeing people she worked with for fifty years; and even though she was no longer able to perform her job, it was difficult to convince her it was time to retire.

Some people retire and then had to go back to work full time because they can’t make it on their retirement income. Others, pick-up part time work, to help make ends meet. If they are younger than full retirement age (between 66 and 67 depending on year of birth), they can’t work full time without jeopardizing their monthly Social Security retirement income.

I’ve even talked to people who say they don’t know why they haven’t retired. It’s like they are used to getting up every day and going to work, so they keep doing it.

Then, there is the smaller group of persons who retire young and successfully pull it off. I wish there were more people like this. I’m not advocate of going home and growing old until you die. I just like the idea of being able to transition to not having to go to work for someone else, to doing whatever God has next (volunteering, going back to school, traveling, spending time with family and friends, having important conversations, creating memories, and/or paying it forward.) Consider these things when planning for retirement.

How Much Money Do You Need?

How much will you need in retirement? What percentage of your current income do you think you will need? There are free apps online that can help you project that dollar amount based on your age now, the age you want to retire, and your responses to a few questions. These apps will give you your retirement amount, with consideration of inflation.

How Much Debt Will You Have?

How much debt are you entering retirement with? Will you still owe on a mortgage, real estate, taxes, car note, student loan debt. Did you know the government can garnish up to 25% of your Social Security check for unpaid federal student loan debt? Very few people bring home more income in retirement than what they did when working. Most are in the other category. That means, it would behoove you to get rid of all the debt you can before you retire. Be aggressive about getting debt gone. You will be better able to fund retirement on a modest income, if you don’t bring a lot of debt with you.

Is Your Savings on Course?

How much do have or are on course to have for retirement? You will need your pension, savings, and Social Security Retirement Insurance Benefits. Be intentional and aggressive- especially as you approach retirement age.

Regarding your pension, that means you have to stay employed somewhere. You can’t do like I did for many years and bounce around for an extra twenty-five or fifty cents an hour. So, find somewhere you’d like to be long term and try to stay put. Government agencies allow you to move within that branch of government and keep your pension. So you go from the Internal Revenue Service (IRS) to the Office of Personnel Management (OPM). That can be a win for you.

Regarding savings, what do you currently have saved for retirement (including 401K at work, including equity in assets like your home)? How much and how aggressively are you routinely contributing your 401K and other investments? If your employer matches your contributions, seriously consider maxing out the match if you are not already doing that. That means, if they give you $1 for each $1 you contribute, up to 5%, then contribute the full 5%. That’s 100% gain. If they match a lesser amount or percentage- whatever, max the match. If you can’t do the full match now, get rid of debt to free up money so that you can.

Regarding Social Security Retirement Insurance Benefits, how much do they project you will have when you retire? Create a free online account and get your projection. Keep in mind that the sustainability of the fund and payouts are always topics of concern. Do not build your retirement based on solely Social Security Retirement. Let it be more like icing on the cake and prayerfully things will work out.

Conclusion

There are no guarantees, but don’t use that as an excuse not to make the wisest decisions you can. No matter what your age or stage, it’s not too late or too early for you to be intentional and active in learning and planning for a successful retirement. Keep learning, applying, an growing.

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This information is for educational purposes, only.