During the early years of working, you probably viewed retirement as a far-off dream. As retirement looms closer, however, the thought of leaving behind the familiarity of work can raise questions about your readiness. As you are planning for your retirement, you might be asking yourself the following questions. Luckily, we have answers.
For many retirees, having enough money to enjoy a satisfying retirement is a major concern. Fortunately, enjoying a happy and fulfilling retirement does not necessarily require spending a lot of money. It's true that the best things in life are free; for others, there are discounts.
Here are 26 steps you can take in your day-to-day life to reduce or eliminate expenses that won’t impact your quality of life.
This is probably one of the most significant questions facing workers approaching retirement age, and it's not simple to answer. Some experts will tell you that you will need 80 percent, 85 percent or even 100 percent of your pre-retirement income to live comfortably during retirement. Other sources report that you need some level of savings, such as $1 million, $1.5 million or eleven times your ending salary to be able to finance your retirement.
But the question of how much money you need to retire can't be answered by a one-size-fits-all formula. There are at least seven questions you need to ask – and answer – before you can determine how much money you need to retire.
Are you facing the prospect of a retirement in which the defining characteristic is financial struggle?
Are you concerned that you haven’t saved enough for retirement?
The internet is awash with stories and articles about how you can live comfortably overseas for just $1500-2000 a month – which is within range of most couples’ Social Security checks.
These figures are said to include rent for a two-bedroom furnished apartment, meals (including some meals eaten out), and utilities, including internet service. The people who write these articles claim that you don’t have to pinch pennies to achieve these results, nor do you have to live in squalor.
Can this be true? Such claims always prompt the skeptical me to think, “If it seems too good to be true, it probably is.”
Are you concerned about having enough money to enjoy a satisfying retirement?
At a more basic level, are you worried about having enough money to survive during retirement?
If so, you are not alone. Having enough money is the single biggest concern of most retirees.
When new people subscribe to Retire Fabulously!, I ask what their most pressing concern is. “Having enough money” is, by far, the number one concern.
While Retire Fabulously! is not a financial planning website, and I am not a financial planning professional, in this article I will offer a wide range of suggestions for enjoying your Renaissance years with limited financial resources.
People have a lot of misperceptions about retirement. I’ve heard a lot of them over the years, and I’ve become especially aware of them since I started reading and researching extensively in order to produce content for this web site.
Where do these misperceptions come from? Generally, misperceptions thrive wherever there is a lack of knowledge or awareness. And many people rarely think about their retirement during their working years.
The average 50-year-old in the United States has saved $43,797 for retirement. 36% of Americans have saved nothing for retirement at all.
Whenever I think about this sobering statistic, it leaves me sad and perplexed. Why are we, as a nation, so underprepared? I am convinced that this situation exists because these misperceptions exist.
Financial preparedness aside, I have observed that many people either view their retirement with dread or, on the opposite end of the spectrum, with an overly simplistic and rosy outlook.
Let’s take a look at twelve retirement myths, and then consider the reality that undermines each of them.
Perhaps your answer is not just “no!” but a resounding, “HELL no!!!”
It may seem like an oxymoron to see “working” in the same sentence as “retirement.” By definition, isn’t retirement what you do after you stop working?
Not necessarily. Retirement comes in many shapes and sizes, and encompasses a wide range of possibilities. Ultimately, it means whatever you want it to mean.
You may find yourself working in one way or another after you retire.
As many as 72% of all people (in the U.S.) are expecting that they will work after they retire, in one form or another.
This could be driven by financial necessity, the need to feel productive or relieve boredom, or the desire to do something you’re totally passionate about. Hopefully, your decision to work will be part of the retirement lifestyle you choose as opposed to being forced to work.
Do you dream of retiring early? If you can make just a few small changes in your day-to-day life, you can.
Are you concerned that you won’t have enough money saved to retire at all, or that you won’t be able to enjoy the kind of retirement you would like? If you can make just a few small changes in your day-to-day life, you can.
So, what’s the secret to retiring early? It’s simple: save more.
I can already hear you saying, “Well, duh...” But if it’s this simple, why aren’t you (and most people) doing it?
Back in January, 1980, when I started my first job out of college, I was pretty naïve. I had no idea how to advance my career, navigate office politics, or even dress well. I can laugh now at how clueless I was back then and marvel that somehow things worked out and I enjoyed a reasonably successful career in spite of it.
But I made one decision that turned out to be one of the smartest things I have done in my life. It set me on the course to be where I am today.
After years of struggling to get by as a college student, living as cheaply as possible with just a few extra bucks here and there, now suddenly I found myself with a regular paycheck coming in!
This question is usually first and foremost on people’s minds when they contemplate when they can retire and what sort of lifestyle they will be able to enjoy in retirement. And it’s an important question – but one that’s not simple to answer. Most important, there are a lot of other questions you need to ask – and answer – before you can answer this one.
First, an important disclaimer: I am not a financial planner. The purpose of the website is not to dispense investment advice. I wholeheartedly recommend that you work with a good financial planner to find the best investment strategy for your circumstances.
Instead, the purpose of this website is to help you with all of the other considerations you need to think about in order to visualize, plan for, and ultimately enjoy a fabulous retirement. But these topics are inextricably linked with financial concerns, so I will talk about money in these contexts.
The biggest concern I have with the vast majority of books, articles, presentations, and employer benefit plan communications, is that they don’t address these other questions.
If I told you, “In order to have a happy, comfortable life, you need to find a job that pays you $100,000 a year,” how would you respond?
You would probably tell me I’m full of crap, or at least you’d tell me that I’m being naïve and simple. And you would be correct. Why?