What Do You Need to Do to Plan for Retirement Readiness?

First, figure out what type of retirement lifestyle you want. Do you want to travel? Do you want to downsize your home? Do you plan to stay in the same location or move? Knowing what kind of retirement you want and what you’ll need to pay for it will help you create a plan.

Second, calculate how much income you will need to fund your retirement lifestyle. Make sure to factor in inflation, taxes, and any other expenses you will encounter. Once you know what you need to save, you can create a plan for getting there. Make sure to contribute to your employer-sponsored retirement plan, such as a 401(k) or 403(b). If you are self-employed, you can open an individual retirement account (IRA).

Third, look into other sources of income. Are you eligible for Social Security benefits? Can you get part-time work or take on a side gig?

Finally, review or create a will or other estate planning documents. Make sure to name a power of attorney, designate beneficiaries, and understand how taxes will affect your estate.

Retirement readiness requires planning and preparation. Stay informed about retirement savings options, create a plan to reach your retirement goals, and make sure you have a cushion of emergency savings. With the right planning and preparation, you can enjoy a comfortable retirement.

Video Transcript: 

Hi, my name is Melissa and today we're going to talk about retirement. So, a lot of times we get phone calls or have conversations with individuals and say, you know, I'm really starting to think about retirement or I'm really wanting to know how much I need to have saved or how can I afford retirement.

What does that conversation look like? So, to help you prepare an answer, when can I afford to retire? Or am I really ready for retirement? Maybe five years out? There are some conversations or questions we need you to answer before we can really help you answer those questions.

So, the first thing we need you to do is we need to have you write down what are your needs in retirement, right? What does it cost to keep the lights on? How much is Internet cable, and cell phone? What bills do you need to pay when you're in retirement and you're needing to make a paycheck for yourself? So, I like to always start out with two categories.

Again, like I said, your needs. What bills are we going to have to pay in retirement? And then think about lifestyle. What fun things are we going to be wanting to do? If we're retiring at age 65, for example? Maybe the first ten years? We want to make sure we're traveling. So, what do we need to do? An extra $12,000 in years 65 through 75 and then maybe years 76 and on we're not going to do as much traveling.

So, we need you to think through one, what do we need in retirement, and then what do we want to have for fun? So, let's say we get to a number where I need $5,000 a month, right? Well, then we know what that number is.

Second, what are you expecting from Social Security? Did you know that over 40% of people have no idea what their estimated monthly benefit is? And if you are one of them, that's okay. All you need to do is go to SSA.gov and create an account. And you can see your estimated monthly benefit. You can also see what your full retirement age is. That's super important. The reason why we need to know what your full retirement age is because if you want to continue working while receiving your Social Security benefit, there are some tax consequences or things that you just need to be aware of.

So, the third thing that we need to make sure that we cover is what other savings you have. Do you have a pension? Do you have a 401(k)? Is it traditional or is it a Roth? Do you have an IRA or a Roth IRA? What other type of savings do you have that we need to make sure we're including in your planning? So, you would want to make sure you gather that information. You know, your Social Security amount, you know your budget, and we know what other savings you have.

So, once you gathered all this information and you're wanting help answering a question like when can I afford to retire or how much will my retirement savings last? We'd be happy to set up a meeting.