Retire on Your Terms - The Best Methods to Retire on Time
Would you rather work because you have to? Or work because you want to? For some nearing retirement, the decision to continue working, either full time or part time, is based on the essential need to keep working to save more for retirement or help cover expenses in retirement. For others, the decision to continue working is based purely on their passion to continue working. As we help individuals and couples prepare for their retirement years, it is helpful to have a blueprint, a retirement plan.
As you build a retirement plan, you need to have appropriate expectations. Is it realistic to retire at age 65? Or is it more realistic to work an extra year or two? What would it look like if you added a few years of part time work? Or what if you saved more now?
The 2016 maximum contribution for an IRA or Roth IRA is $5,500 ($6,500 if you are age 50 or older). The 2016 maximum contribution for a 401k is $18,000 ($24,000 if you're age 50 or older). Knowing this, is there more you could or should be doing now to build your retirement assets?
Along with realistic expectations, are your projected retirement spending needs accurate? As you transition to retirement, do you really want to take a pay cut? Do you truly know what you are spending now to help build a plan that maintains your current lifestyle? And are you planning for longevity? What if you do live to age 85? Or 90? Will your retirement assets last? On the flip side, if your assets outlast you, do you have a legacy plan to leave assets to children, grandchildren and/or charities?
The best of plans require a little wiggle room. Despite our efforts, we all know that most plans do not go 100% as hoped. As you near retirement, there may be unexpected expenses that could change your retirement plan. Some things cannot be predicted. So we encourage you to focus on what you can control: what you save now, what you plan to spend in retirement, and when you will actually retire.
Do you need help building your retirement plan? Please don't hesitate to contact us.
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