Do you have enough to retire?
It’s a common question that is posed to many financial advisors on a weekly (or daily) basis. After a lifetime of working and saving and planning, when retirement is finally nearing, will you have enough? According to Pew Research Center[1], the pace of Baby Boomers entering retirement is accelerating, including an increase in retirement among adults ages 55 and older. Half of people aged 55 or older — or 50.3% — were out of the workforce due to retirement by October 2021[2].
Making sure your savings and financial plans are bolstered to handle the unforeseen can provide reassurance before you or your spouse retires. 1 in 5 retirees were surprised by an unexpected expense, like a medical bill they hadn’t anticipated, according to the Society of Actuaries[3].
Close to retirement? Don’t forget these things
- The most important for retirees or if you are getting ready to retire would be to keep an eye on your cash flow/savings!
- Make sure you are checking your asset allocation and don’t’ try to time the market! You are in the final stretch; you don’t want to make an impulsive money move that you’ll regret.
- Checking your account balance every day is not helpful either. If you are following a financial plan and have worked with a financial advisor, you’ll know if you are on track to meet your goals.
- If you are thinking of making a big purchase, consider holding off for a little bit. With the uncertain inflationary headwinds, we are facing, if you can wait, we advise you to pause.
- Keep an eye on your budget and look for ways eliminate unnecessary expenses.
- Continue to work in some sort of capacity (even if it’s just part-time). A recent AARP[4] report that looked at data from hiring platform Indeed.com, found of retirees who had retired a year earlier, 1.7 million, or 3.3 percent, are employed again. The majority of these so-called unretirees are working part time. They cited inflation, stock market volatility, availability of remote work, need for health insurance and companionship as the top reasons for seeking work after retirement.
- Bridge jobs, which are characterized by a job outside of the full-time career a retiree might work, provide a slow shift to retirement, offer fewer hours and often a less stressful work environment.
Choosing to delay retirement can also allow you to put off drawing your Social Security payments too, which in turn means a higher monthly check when you start drawing. The Social Security Administration explains Social Security retirement benefits are increased by a certain percentage for each month you delay starting your benefits beyond full retirement age, which varies based on the year you were born[5]. It provides an online calculator, which can help you decide the best path for you, but a person can receive his or her largest benefit by retiring at age 70.
Katy Ufferman (ChFC) is a chartered financial consultant with Maxwell Financial Management and leads the firm’s practice dedicated to helping women with their investments and retirement planning. Read her latest blog at https://www.maxwellfm.com/blog.
The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual.
[1]https://www.pewresearch.org/fact-tank/2020/11/09/the-pace-of-boomer-retirements-has-accelerated-in-the-past-year/
[2] https://www.stlouisfed.org/on-the-economy/2022/january/great-retirement-who-are-retirees
[3] https://www.marketwatch.com/picks/1-in-5-retirees-dont-see-this-expense-coming-or-its-315-000-pricetag-01664824517?siteid=yhoof2
[4] https://www.aarp.org/retirement/planning-for-retirement/info-2022/returning-to-work.html
[5] https://www.ssa.gov/benefits/retirement/planner/delayret.html#:~:text=Social%20Security%20retirement%20benefits%20are,when%20you%20reach%20age%2070.