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?
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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
Don’t Be
a Repeat Retiree by Robert J. Reby Do you know a repeat
retiree? This is someone who decides to retire after years of hard work, only to find himself or herself missing the action
and back at it a few months later. Then, in a few years, they retire again. Unfortunately, not all repeat retirees are so
by choice. There are many who return to work because they have to — they’ve discovered too late that their nest
eggs aren’t enough. 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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