It’s Time To Retire


What Would You Advise Boomers Thinking About Retirement To Consider

Knowing When It’s Time to Retire

Have a plan. A plan that includes both lifestyle issues and money issues. Too often the retirement plan focuses on the financial issues. remember that retirement is about more than just money. You can have all the money in the world but if you dont know how to spend it or have good people around you or you dont have your health, what good is the money? Remember the point of money is to buy you a life and that retirement is really about living the golden years.

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Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace.

For more information you can follow him on Twitter or visit his other websites and Clearpoint Benefit Solutions.

How Will I Pay For Health Care

Health care is most retirees largest expense, yet its one that many people dont adequately plan for.

If you are retiring before age 65, you need to think about how youll pay for health insurance before Medicare kicks in. You will probably have the option to buy COBRA from your previous employer, but those policies can be pricey and only last for up to 18 months. What will you do for insurance until you are eligible for Medicare?

You can purchase private health insurance on your own, but these plans are expensive. You might be able to find more affordable options through the Affordable Care Act health care exchange in your state.

Remember, even with Medicare, you can still have significant out-of-pocket health care outlays. According to the Fidelity Retiree Health Cost Estimate, a 65-year-old couple retiring in 2020 will need $295,000 to pay for medical costs not covered by Medicare.

And dont forget about long-term care, which has the potential to derail your retirement if not accounted for properly. Consider this: A private room in a nursing home averages over $8,800 a month, reports Genworth, the insurance company. Whats more, a person turning 65 today has a 70% chance of needing some type of long-term care, according to the U.S. Department of Health and Human Services.

You May Have A Long Long Life Ahead Of You

A woman who retires at 55 will have to make her savings last for 28.6 years, on average, compared to 20.4 years if she retires at 65. A man who retires at 55 will have to stretch his savings for 25.1 years, rather than 17.8. And for couples who make it to 65, there’s a 25 percent change that the surviving spouse lives to 98, according to the Society of Actuaries.

“With improved health care, many people are living longer than the national averages, says Angela Dorsey, a certified financial planner in Torrance, California.

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Opportunity For 1+1 To Equal 3

There will be an opportunity to connect systems and share data across the entire enterprise to improve performance across every department. What today seems like definitive demarcation points between departments with regard to technology and data will dissolve providing every department with more technology power and data to leverage.

As technology dots connect, organizations will leverage machine learning and artificial intelligence to mine their data for insights to improve business performance and their customers experience. It was not too long ago that this seemed a long way off, but were now here just past the starting line. All in all, I think it is fair to say weve digitally transformed and are now on a new path of technology evolution.

You Must Collect Distributions From Your Retirement Plan

Sometimes You Have to Admit It

If you have a 401 or IRA, there comes a point at which you are required to take distributions. For most people, this age is 70-½. You can delay taking 401 distributions until after you stop working, but not for the money in a traditional IRA. If you are being forced to take distributions, there’s not much incentive to continue working.

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You’ve Created A Retirement Budget

This may seem like a no-brainer, but many soon-to-be retirees don’t crunch the numbers. Before you ditch your career, it’s important to figure out whether you can live comfortably on your post-retirement income.

Start by adding up your must-have monthly costs, including mortgage or rent, groceries, electricity, and other utilities. Then add in your “wants,” such as travel, entertainment, shopping, and dining out. Once youve calculated your estimated monthly expenses, it’s time to figure out whether you’ll have enough income to cover them. Add up your estimated Social Security benefits, retirement account distributions, pension payments , and any other sources of income you will have. Remember that you will owe income taxes on all distributions except Roth IRAs, Roth 401s, and a portion of Social Security

Once you figure out your retirement budget, now comes the time to estimate how much income you will have to cover those expenses. As mentioned earlier, your sources of income will typically include retirement savings, Social Security, and pension payments, if you’re lucky enough to have one. Another key rule of thumb when determining how much income you will have in retirement: “Your retirement budget, if you retire in your mid-60s, should not exceed 4% of your investments plus Social Security and pension payments,” says Kristi Sullivan, CFP®, of Sullivan Financial Planning LLC in Denver, Colo.

What Matters Most Is Being Prepared Financially

When is the right time to retire? Its a question that depends on your personal needs and circumstancesnot to mention your plans for what you’ll do instead. We’ve all had days when we’re prepared to hand our boss a resignation letter and lead the good life of a retiree. While leaving the workforce early might sound like paradise, it can be a big mistake if you’re not financially ready to live without a paycheck. Here are some of the pros and cons of quitting your job at different ages.

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Retirement Can Be Tough On Couples

“Retirement is a major life transition, and you have to be patient with yourself and your spouse, says Patti Black, a certified financial planner in Birmingham, Alabama. Most retired couples do not look like those pictured in ads and commercials. You’ll have to decide how work around the house will change. Will you really share cooking, cleaning and yard work? And do you honestly want to be together 24-7, particularly if you downsize to a smaller home?

These decisions can have serious consequences for a marriage. Gray divorce, or divorce after age 50, has doubled since 1990 while declining across all other age groups, Black warns. And it is most often the wife who asks for divorce after age 50.”

John Waggoner covers all things financial for AARP, from budgeting and taxes to retirement planning and Social Security. Previously he was a reporter forKiplinger’s Personal FinanceandUSA Todayand has written books on investing and the 2008 financial crisis. Waggoner’sUSA Todayinvesting column ran in dozens of newspapers for 25 years.

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Is It Time To Retire Retirement

When Your Body Tells You It’s Time to Retire

Is the concept of retirement no longer relevant?

For starters, there are any number of consumer surveys that suggest that a growing number of American workersof all agesno longer expect to retireor expect to do so at ages well beyond what is likely to be available to them.

Moreover, there is a growing consensus that emphasizing retirement is not effective at encouraging individualsparticularly younger individualsto save for retirement. And thus, a suggestion has emerged that that focus be reframed as a goal to achieve financial freedom.

Now, younger workers have never been all that enthused about saving for retirement. Indeed the participation rate for those under 30 has long lagged that of their elders, a factoid that is often obscured by aggregate participation rates. More recently, that participation lag has been muted by the advent of automatic enrollment , and yet it remains.

So if these days the talk is about emphasizing financial freedom, rather than retirementI get that. Retirement is for old people, and nobodynot even those who are old think of themselves that way. But what is financial freedomhow are we to determine it, what life milestones and markers would apply? Arent we just swapping out one hard-t- articulate/define/quantify concept for another? Indeed, one could argue that its even more complicated, even more individualized than retirement, which at least has general age and longevity parameters to bound in key assumptions.

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The Common Theme Is Planning

Whether you want to retire at 55, 85, or any time in between, planning is the key to a happy life in your golden years. At Webster Investments we are here to help you periodically review your retirement options. Call us today for a no-obligation financial review that will help to evaluate whether the time has arrived to wrap up your work life and start enjoying your retirement years.


This material was prepared for Webster Investments and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

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Create A Culture That Honors Experience

If companies are to win back the hearts and minds of baby boomers and other generations of mature workers, they need to start with the work environment itself, which has become increasingly alienating to anyone over the age of 50. Human resource practices are often explicitly or implicitly biased against older workers, and these biases can seep into the culture in a manner that makes them feel unwelcome.

Traditional recruiting channels such as want ads or help wanted signs may not attract older workers either. Twelve years ago, pharmacy chain CVS looked at national demographic trends and concluded that the company needed to employ a much greater number of older workers. But managers didnt know how to find themolder people shopped in the stores but didnt apply for openings, perhaps believing they wouldnt be hired. Now the company works through the National Council on Aging, city agencies, and community organizations to find and hire productive new employees.

Retirement, as its currently understood, is a recent phenomenon. For most of history, people worked until they dropped.

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How Old Do You Have To Be To Retire

Full retirement age, or the age you need to be to collect full Social Security benefits, is 66 years and two months for those born in 1955 and will gradually increase to 67 for those born in 1960 or after. How old you have to be to retire comfortably depends on the lifestyle you want to have and how much you have saved. The earlier you retire, the larger the nest egg you will need.

The Best Time To Retire

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As part of your retirement plans, you need to seriously consider the best time of year for you to retire. Not only are there financial implications to think about but you should also consider the season at the time of your retirement.

Be sure to check the programs at your company before tendering your resignation.

Cost of Living: Some employer benefit programs state you must be retired on or before July 1st to receive any cost-of-living increase on your pension granted for July 1st. This means the on-going pension will actually be less if you retired in July or August compared with retiring on or before July 1.

Vacation Payoff: The first week of January may be appealing to begin your retirement especially if you are carrying more than the maximum accrual for vacation. You could get paid for the total as long as you retire before the end of the first pay period in January. Retiring in January also gives you the entire year to absorb that lump-sum payoff.

Tax Considerations: Tax considerations and the best time to retire are different for each person. Its worthwhile to estimate your taxes based on different dates throughout the year. I strongly recommend getting advice from a tax advisor a year or two before you plan to retire.

When planning your retirement, decide the time of year that best suits you and your spouse/partner from a financial, seasonal, and goal perspective.

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What Are The Five Stages Of Retirement

How can retirement affect you emotionally? Research shows that for those who choose to fully retire, there are five common stages of emotions they experience. According to Phil Richs text How Best to Retire , the five stages of retirement include:

  • The Pre-retirement or Planning Period, in which you spend your time leading up to retirement imagining what it might be like, what you might spend your time doing, and how you might feel after retirement. You might also be actively planning for retirement and experiencing excitement or anxiety leading up to your retirement date.
  • The Honeymoon Period immediately following retirement. This phase might last on average 3-6 months, though its different for every individual. During this time, retirees reconnect with their families, pursue hobbies, and spend time traveling or checking off items on their bucket lists.
  • The Disenchantment Period, which may begin once you have checked off many of your to-dos on your bucket list. In this period, you might start to feel disappointed or as though retirement isnt living up to your pre-retirement expectations. You may even feel like something is missing.
  • The Reorientation Period To pull themselves out of the disenchantment rut, this is the time when retirees might start building a new identity or pursuing new hobbies. They might start volunteering or thinking up new ways to spend their leisure time.
  • You Dont Want To Work Anymore And Can Afford To Do So

    A job change doesnt interest you. Changing your line of work doesnt interest you, either. Instead, you want to get out of the rat race forever. Whats more, you have sufficient savings, little to no debt and are ready to live a simple life. Who says you cant retire if you meet these requirements?

    Lyle Solomon, a principal attorney at Oak View Law Group, is the author of Think Different! Save More!

    As someone close to retirement age, I speak from experience, he said Most financial experts and retirement planners will recommend completing three primary retirement goals. First, start saving for retirement early and get Social Security benefits for as long as possible. Second, follow strategies to save enough for your retirement years so that you can live without financial stress and have a regular income. And finally, build an emergency fund that will help you meet unexpected costs.

    Beyond those basics, he had three tips for knowing when its a good time to retire: Youve invested in good health insurance, youve gotten your partners approval for retiring early, and you dont have any dependents. To Solomon, these are the three best indicators you can retire early once youve covered the basics.

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    Will You Work On A Part

    Many people today are choosing to earn money as a freelancer or contractor after they retire. If you work part time and elect to start receiving Social Security benefits before you reach the full retirement age which is between 66 and 67 years old, depending on when you were born your Social Security benefits may be reduced based on your earnings.

    If you will:

    • Be under full retirement age for all of 2021, you are considered retired in any month that your earnings are $1,580 or less and you did not perform substantial services in self-employment.
    • Reach full retirement age in 2021, you are considered retired in any month that your earnings are $4,210 or less and you did not perform substantial services in self-employment.

    If youre retiring before reaching FRA but expect to earn more than $1,580 a month in income, and you will reach FRA sometime during the year you plan to retire, you should probably wait until after your birthday to retire and claim Social Security benefits.

    The Social Security Full Retirement Age


    For persons born in 1960 or later, the Social Security full retirement age is 67. You will receive 70% of your monthly benefit if you retire at age 62, and 86.7% at age 65. However, youll get the maximum monthly benefit if you wait till age 70. These milestones might be an important consideration if your Social Security benefit will be a sizable portion of your retirement income.

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    Have You Saved Up Any Cash Reserves

    Some financial advisors recommend saving enough money in a liquid cash account to cover the first few years of living expenses after you retire. Then you wont have to tap into your retirement accounts if the market is down at the time when you begin your retirement.

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    However, if you dont have any cash savings and will need to start withdrawing money from your retirement account as soon as you retire, you may consider retiring either very early or very late in the year. This could allow you to avoid making retirement account withdrawals in a year when you might have earned income that would push you into a higher tax bracket.

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