Category Archives: Retirement Planning

Surprise – you are About to Retire

A surprising statistic about people when they expect to retire suggests that only 23% of people expect to retire before they turn 65, While fully 69% actually retired before they turned 65. This is a really huge change in plans for many people. We wonder if they were ready emotionally and financially to retire and really not take another job. For many people it comes as a big surprise.

Surprise – you are About to Retire

For many people they end up retiring early due to health reasons. As long as you have your health there is a really good chance that you will continue working. But many are finding that their health gets in the way of working. They have the decision made for them. In addition, many companies regularly go through downsizing of some kind. The package offered to older workers is just to good not to take advantage of. For whatever reason, many of us end up retiring much earlier than planned. For those of you reading this post, the message is get your retirement savings in order. Make sure you have the flexibility at least from a financial perspective to retire whenever it is right for you.

Emotionally you may not be ready for retirement. You feel too young and you feel that you have a lot to contribute to the company and to society. You may miss the social life at work. Many have not developed the hobbies and the interests that will sustain them in retirement. Developing the emotional and social plans to be ready for retirement before you retire is something that many people may want to consider. Going cold turkey i.e. quitting work without a plan can be very difficult.

Take Stock of Your Situation Now

If you suddenly find yourself in retirement due to health issues or your company has downsized, it is time to take stock of your situation. Assess your financial readiness for retirement. Do you have enough money saved which combined with your pension will allow you to live in the manner you envisaged during retirement? If not you may have to take some steps towards either finding another job or downsizing your expenses.

Downsizing your expenses is best accomplished by first developing a budget. Figure out how much money you have in terms of income each month and then assess all of your expenses. If income minus expenses is a negative number, it may be time to cut back in some areas and reduce your expenses until the income“ expense equation becomes positive.

Take the time to be realistic about your retirement. Investigate self-help information available on this website and others. Figure out emotionally how you want to deal with retirement and decide if you need to downsize your home, your cars, your travel plans in order to fit your expense budget with your income budget.

The transition for some people will only take a few months, while for others it may take a year or more. Give it time and rely on others in similar situations for help and guidance. They may not be experiencing the same things as you are but they may have great ideas about retiring gracefully.

Retirement Planning Websites

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There are lots of retirement websites available online. The vast majority of them are trying to sell you something. All of the banks and financial institutions have sites that discuss retirement plan options. They have calculators and much more. All investment advisers also have web sites that discuss the various options they offer. They extoll the virtues of saving and investing. We want to say at the outset we are not trying to sell anything to you at all.

In fact, we would like to hear from people about what they think about some of the posts on this website. We are retired and we read a lot about various issues associated with retirement and try to apply them to ourselves. When we learn about these issues, we write about them and put our own thoughts on the issue. These posts reflect our opinions and we hope it spurs readers to give them some thought about planning for retirement. It is not an easy subject. It can be complex especially when bankers and financial advisers are trying to sell their products. These include bonds, mutual funds, or their stock plans to you inside a tax-deferred retirement plan.

Wealth Management and Large Companies

They have very large divisions of people who are totally focused on helping you with your retirement planning. In return, they want your investments so they can collect fees for their services. They are making a lot of money off of their clients. We sometimes wonder about how much they are helping the customer. While helping themselves to your money through fees and commissions on trades and management fees.

We like to use web sites that have tools for tracking investments. Also for projecting these investments into the future for planning purposes. We look for the lowest fee structure for trades. We want to avoid paying someone to manage our money and get paid even if there is a loss. They should be risking something as well as us.

Retirement Planning Websites – Be Careful with Personal Information

There are literally thousands of retirement planning websites available and they want you to enter information into them. Be careful about what you provide. They may be able to track your investments and they may be sending you sales-related information often. Some sites do provide useful information. While others send information that is really veiled sales advertising. They want some of your business that you have been planning.

We use a spreadsheet that tracks our investments, estimates income, and estimate the value of our investments out 10 years or more. We know exactly where we stand at any time relative to our investments and our planned retirement. There is no need to update a website and we do not need to set up a meeting either to estimate our income. For us this is the best way to manage our retirement planning. It is our way of making sure that we have more than enough money when it comes time to retire.

Mid Year Tweaks to Your Retirement Plan

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Gold is down significantly from the beginning of the year. Many people who are the so-called gold bugs have lost significant amounts of money as a result. Stocks are up a great deal. They are also volatile with quite wide swings. This volatility can unnerve many investors who depend on their savings for their retirement income. It might be time to make mid-year tweaks to your retirement plan. Monitor your retirement savings and make cautious adjustments to ensure that your plan is not jeopardized over the long term. Work with an adviser to ensure that you do not sell low and buy high. If you can live on income and not touch your principle, you will be sheltered from any of these wild swings.

Tweaks to Your Retirement Plan

Interest rates edging up over the past few months for loans and mortgages. Many people who did not lock in a mortgage interest rate before the rise are now wondering if they should put off buying a home. An increase of 1% can add hundreds of dollars a month depending on the size of the mortgage. Recently interest rates have settled down. Governments in North America are suggesting that they will remain low for the next year and a half.

The economy is slowly improving and for those people who have a job, life is tolerable. But if you do not have a job or if you are just making enough to pay the bills, retirement savings are something that you dream about vs. actually having. Let’s hope the slow economic improvement continues. It is better than drastic increases which can go down equally as fast providing for a lot of turmoil in people’s lives. Although frustrating for many people, a long slow improvement is actually better for everyone than a fast trip up and then down over the cliff.

Storm Clouds Brewing

Nevertheless, there are lots of storm clouds churning away. Europe is still unstable but making progress. China is slowing its growth forecast and even in the US, the slow economic improvement is a worry for many people. There have not been any major storms this year that affected the economy or the oil industry. But there have been a lot of smaller storms that have hurt people really badly, however not on the scale of some of the bigger hurricanes.

There is always something going on and with all that is currently taking place, it is time to review your retirement plan. You may need to make mid-year tweaks to your retirement plan if necessary based on a thorough balanced review. Tweak only if necessary to balance your retirement plan, reduce risk, increase income and make cash available when you need it. Check with your financial adviser to confirm you have a well-balanced retirement plan. Invest for the longer term and avoid reacting to short-term stimuli from outside sources on the stock market.

Retirement Plans for Individuals

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There are several questions which will make a huge impact on your success at planning and saving for retirement! All the rest of the decisions are trivial by comparison. Fussing over the rise and fall of the stock market will make little difference in the big scheme of things over your working life. Investing in quality investments and not chasing get rich quick schemes will also make a difference. Â Depending on how you answer these questions and how you apply these answers to these questions will determine your long term retirement lifestyle and quality of life. This is important since it affects how well you will live during your retirement, the quality of your life, and what if anything you leave to your heirs. Focus on these for success.

Retirement Plans Questions

Are you a saver or an investor?
How should you divide up your money?
How much help do you really need?
What’s the best use of tax-deferred plans?
How much can you draw from your savings?

More Details

1. Are you a saver or an investor? Long term savings using conservative investments have proven to be more successful over the long term compared to chasing the elusive stock speculation objective. Saving at least 10% of your income every year is going to make a huge difference. Not touching this money and not taking it out early will ensure that you have adequate savings when you retire. Some experts suggest that you need 11 times your salary saved up to ensure that you have adequate funds for retirement.

2. How should you divide up your money? Practice diversification between stocks, mutual and bonds to protect from market swings. Avoid placing all of your money in one investment or even with one investment manager. Diversity over the long term is the key element along with investing in quality stocks, bonds, and mutual funds. Focus on dividend-paying stocks who have both a growth trend in the value of their shares and a history of increasing the dividends each year.

Get Advice

3. How much help do you really need? Get advice from experts and teach yourself about investing and planning for retirement. If you need help with calculations of how much retirement income you will need and how much you will have don’t hesitate to ask for it. But fundamentally retain control and never turn complete control over to a so-called expert. Be involved in all decisions and if you do not understand what is being suggested, ask enough questions to allow you to understand, and if you still donâ€™t get it, then back off until you do understand.

4. What’s the best use of tax-deferred plans? The experts can help you figure out the right balance between tax-deferred plans and regular savings plans. Remember that tax-deferred plans mean that taxes are deferred until later in life presumably when you have a lower tax rate. The government wants you to be self-sufficient, but they also want your taxable income as well.

5. How much can you draw from your savings? When should you retire and how much can you take out each year to make sure your money lasts through your retirement. Some experts say that if you take out 4% each year you have an 80% chance of your money lasting during your retirement. This obviously depends on how you are invested and how long you live. Â Investing in GIC’s at 1 to 3% will likely mean your money will run out early. Investing in dividend-paying stocks and living on the income only will ensure that the money lasts much longer. Figure out how much you need and withdraw money from your accounts accordingly.

Retirement Plans – Summary

That’s it, lots to think about but only five questions! They are complicated questions but given our lifelong practical experience, we think these are the important ones. Invest wisely, get involved, and keep abreast of what is happening in the markets. Focus on the medium to long term and do not react to the short term volatility of the markets.

If the market’s plunge and you are well invested in high-quality blue-chip stocks you probably will be ok. The markets will recover. You must monitor and make sure that you are not invested in a company such as GM who was considered blue-chip at one point then went bankrupt when the economy tanked and they could not react in time. Bankruptcy was the only option to clear debt and to clear union contracts that were holding them back and making them totally unprofitable. So monitor and if you are concerned talk to the experts and then make you own decision.

Retirement Plan Options

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With so many people retiring these days we thought we should do a series of posts about retirement planning and retirement planning options. More people will be retiring than ever before and it is all due to the baby boom group reaching the magic age of retirement. Some will retire at 50, while others will work well into their late 60â€™s or even into their seventies depending on their financial situation as well as their personal objectives.

If there is one message that you should take out of this post, it is â€œplan for your retirement!â€ This can take many different aspects so that is why it is important to begin early, develop several retirement plan options and be prepared to adjust them over time, to select one over the other, and even change them completely based on whatever life throws at you. The important thing is to have a plan, develop the things you need to do to make that plan happen, and then take the action to achieve your plan.

Complete a Financial Plan

Either do this yourself or have a financial adviser do it for you. The data you will need includes:

Planned retirement date
Current savings
Current debt
Present living costs
Living costs first year of retirement
Living cost in subsequent years of retirement
Special costs and expenses that you know about
Planned trips, expenses, etc that must be considered

From this plan, you will quickly know how much more money you need to save to achieve the level of income you will need to live in the style that you would prefer while retired. You may also have some idea of the quality of life you will experience and the things you will like to do wild retired. You cannot sit in front of the TV all day or your health will decline and you will become extremely bored. Planning for retirement and developing retirement plan options is includes financial as well as the lifestyle that you will need.

Test Drive Your Retirement Plan Options

This is an interesting challenge for many people. If you know how much you will have to live on each year during retirement and have worked this out with your investment planner, why not test drive your plan. Take six months or a year, and attempt to live on whatever income you feel that you will have during your first year of retirement.

This can be an interesting exercise for many people who have no idea of how much they need during retirement. If you are going to be short of money, you will quickly understand and the reality check will help to confirm what you need to do to avoid getting into the situation of retiring without enough money to live on or at least live to the level that you prefer. Test each of your options this way to really make sure that your plans will be realistic.

Retirement Plan Options to Consider

There are many options and they will differ for many people based on their savings, their income, and their preferred lifestyle. The following are a few issues to consider as you develop options and try to make up your mind on what the best course of options is correct for you:

Be conservative in all of your assumptions, you will be pleasantly surprised
Diversify your investments
Invest in high-quality investments and avoid chasing high-risk yield
Hire an investment advisor
Never relinquish control
Assess your plan every year to recheck and adjust as needed
Work longer if needed to ensure that you have benefits or income or both
Cut down on expenses where ever you can
Develop the main plan which is the preferred plan and at least two others that include
A plan that is much more aggressive in term of income i.e. +20%
A plan that is much more aggressive in terms of expense I.e. +20%

Develop your retirement plan options using these types of guidelines, recheck every year, and adjust as needed. Be prepared for change and be prepared to keep on working or go back to work to help your plan out if the economy for example does not cooperate e.g. interest rates are low and will remain low, limiting your income as a result.

$800,000 saved; can I afford to retire early?

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Can I afford to retire early when I have $800,000 saved towards retirement and when I retire, I will also collect a pension along with various government pensions? Our home is paid for and we have no debt to be concerned about. We have been doing a lot of research on this topic to understand what the correct answer is for someone in this position, who by the way is in a very enviable position. Most people nearing retirement are not anywhere close to this situation, however, that is a topic for another article.

Can I afford to retire early – Factors to Consider

The quick answer to this question of early retirement under this situation is that it really depends on a number of factors, such as:

How long this couple will live during retirement, some people will spend 40 years in retirement
Exactly when will they begin to collect their pensions, some companies have restrictions that make people wait until they are 60 or 65.
What kind of lifestyle do they want to lead? The 70% rule is very broad and really does not apply if you plan to do a lot of travel around the country or the world.
What will your expenses be over this time period and where will you live? Will you downsize, buy a vacation home, or stay where you are and travel on shirt trips to various places.
When you retire will you have medical coverage or is this something you need to purchase separately?

We suggest that any person who is thinking about retirement take a look at each of these questions and try to address them for themselves and any family members, especially if you have dependents. Preparing a budget on a spreadsheet or with the help of a good adviser will help to clarify this question.

Assess Your Income

Start by determining all of your income streams. Also, the year when you can begin to collect them and how much they will be. You can also factor in growth if these income streams are indexed. The $800,000 is a little more difficult. Some people will decide that they do not want to touch the investments or the income they generate, While others will draw the income off and retain the investment principle. In some cases, you may also want to draw down the original investment in addition to your income that is generated by this investment. You can try different scenarios. Which will reflect these we just mentioned plus volatility in the stock market and the income stream associated with your investments, whatever they might be.

Assess Your Regular Expenses

Develop a budget for your day to day expenses. This would include utilities, food and clothing, taxes and medical coverage, entertainment, and gifts. All of the things that are part of your normal lifestyle. Once you have this expense identified, add in an inflation factor of 3% for each year of your budget. Compare your income to your expenses. Hopefully, there will be still some money left over. Which can be applied to the next area of your budget. Your income may not be sufficient at this point to cover all of your expenses. Some difficult decisions will need to be made. Somehow your expenses will need to be reduced to match your income. Or you will find yourself in a difficult debt situation at some point in the future.

Assess Your Lifestyle

The 70% rule that many people talk about during retirement applies to what we have discussed in the preceding paragraphs. Now you have all of this free time which needs to be filled. Some will go back to work, Some will volunteer and some people will become involved in activities that they never had time for while working. Travel is usually a big factor for many people, which takes a lot of money.

The basic question is what will your lifestyle be like. What will it cost to achieve this lifestyle over and above your basic budget for regular expenses? Readers are urged to give this part a lot of thought. Discuss this planned lifestyle with the family to make sure that everyone is on board. Develop a budget for this part of your retired life. Compare to your income and regular expenses etc.

Can I afford to retire early?

Only after making this assessment, will you be able to determine if the savings that you have set aside will be sufficient to provide the quality of life you expect in your retirement over the next 30 to 40 years.

Will You Have a Choice Regarding When to Retire

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Do you know when you will retire? Will you have a choice regarding when to retire? Most people think that they have the freedom to choose when to retire and that they will retire when their finances are in shape to provide them with the level of income to give them the quality of life they would like to enjoy. For many people this is true, however for many others retirement is quite different from what they planned or expected. The reasons for this change can be many, however it is usually things that occur in a personâ€™s life that are outside their control.

For some people they are let go earlier than they thought they would be from a company and must find other work. Sometimes it is at less money and this means they have to work longer than expected, past the retirement age they anticipated. For others, health gets in the way, either for themselves or for someone who is close to them that they need to look after. We never know what curve balls life will throw at us and that is just one of the reasons why early sound financial planning is important and can make a huge difference in their quality of life.

Will You HaveÂ a Choice Regarding When to Retire

The following are some of the items to consider about this particular issue of Will You HaveÂ a Choice Regarding When to Retire:

What are Some of the Reasons People are Forced to Retire Earlier Than Planned

The reasons can be many, however we have tried to summarize them in the following list:

Company downsizing
Company bankruptcy
Disability
Poor health
Health related issues of a family member
Other events in your life

We all know people who have said they will work until they are 65 and then retire. Suddenly life throws a curve ball at them in their early 50â€™s and they are no longer working for any of the reasons above. Their plans are in disarray and if they did not have a plan in place for the finances, they could be in significant financial difficulty. Surveys have shown that the majority feel they are in control of when they will retire, when in actual fact only a small percentage actually make their own decision about retirement.

Another interesting fact of this survey is that they only have less than a monthâ€™s time in terms of warning that they are going to retire. This is usually a downsizing situation or an incentive plan that is offered. In many cases as well companies simply decide they are going bankrupt and / or closing plants. One monthâ€™s time is not a lot of time to adjust to the fact that you are no longer going into work and earning a paycheck.

Financial Retirement Plans Make the Transition Much Easier

With strong financial plan that has been growing for some time, will ease the transition to retirement life. Your life can be much easier from a financial perspective. Wondering where your money is coming from in retirement worries many people. Whether you have enough income to live the quality of life you are looking is another concern.Â Many people retiring today are going to live 20 or 30 years in retirement and it takes a large sum of money to generate the level of income that is needed to support the life style you need. If you have sufficient funds, you can focus on the other aspects of retirement, which can be equally important.

Retiring healthy and having the money needed to enjoy your retirement are among the top priorities for most people. Without your health, retirement can be difficult and money really becomes a secondary issue. Good health and maintaining your health is the top priority for most people.

Planning For Retirement Early

There are a number of steps that many people can take to prepare themselves financially and health wise for retirement. Will You HaveÂ a Choice Regarding When to Retire. By planning for retirement you will have a much better chance of having enough money to enjoy retirement. We have listed them in the following list in no particular order:

Implement your financial plan
Start saving early
Maintain your health through exercise, diet etc
Have an early retirement goal in mind for your retirement, with the option to work longer if desired
Avoid debt as much as possible to reduce interest cost
Take control of your financial life

These are just a few broad steps that consumers can consider. It will help them to prepare for retirement that comes earlier than expected. A financial plan will help youÂ deal with any issue that comes your way inÂ early retirement. Plan now and have peace of mind.

We have many other posts on this site dealing with financial planning and retirement. Take the time to review Will You HaveÂ a Choice Regarding When to Retire.

Transition to Retirement the Uncharted Course

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The transition to retirement is the uncharted course that many of us are either already on or will be soon since more and more people will be retiring in the next few years. Retirement means many different things to people all over the world. For some it means leaving one job to start another in a different career, while for others it means never to work again for money, but volunteer and provide support to charities and other organizations.

Some people chose to spend a lot of time on the golf course while others will spend a great deal of time with family. There are so many options and people everywhere must figure out what is the right plan for them based on their personal needs and desires and their finances. Do they have the money that they will need to live in the manner they envisaged retirement to be? This the key question for everyone retiring today. How will they Transition to Retirement in a successful and satisfactory manner?

Transition to Retirement the Uncharted Course – Situations

Baby Boomers Retiring â€“ There are literally millions of baby boomers that are retiring over the next 20 years. Some will continue working well into their 70â€™s while some have already retired early. Regardless of when they retire, they are going to shape our economy for many years and investment advisers are lining up to help them to invest and spend their money. The operative word is to be â€œawareâ€ and to be careful with your investments. This is all that stands between you and poverty or at least a less than satisfactory life style during your retirement years. There are lots of scammers out there that are just waiting to relieve these baby boomers of their money. As we get older there is less chance that we will make good decisions and we will tend to spend more money than we sometimes need to. Rely on family if you can trust them; however in general if it does not feel right, donâ€™t spend the money. Wait, think about it, talk to friends and family whom you trust and then make up your mind as to whether it is a good deal or not.

Enjoy Retired Life

This is the most important element and consideration. You want to have sufficient money to be able to enjoy your retirement in the life style that you had planned and that means having sufficient income to meet your needs. It does not matter whether it is golfing every day, being a snow bird and traveling south every winter, going on trips or just spending time with the family. Everyone defines their level of enjoyment differently and all we are saying here is think about what you want for your retirement and then plan to have sufficient money to enable the life that you would like to have. The earlier you start, the better off you are going to be. You may want to work a little longer or you may want to continue working because you enjoy it so much. Decide what is right for you and then develop a plan that is going to get you there while planning for contingencies, since we never know what is coming our way.

Work After Retirement

Some people retire from their jobs at 50 and never work again. While others just start another career. Some will work well into their 80â€™s just because they like to so much. Many people will work as long as they can to augment their income to give them a bit better style of living. The bottom line is that you must have enough money and you also have to have something to do. Most people are not satisfied to just sit around and do nothing. We need to have hobbies, we need to volunteer, we need to spend time with the family and we need to feel that we are still contributing to life. Whatever works for you is great; just know that you need to have a plan and activities that will enable you to enjoy your retirement.

Can you Depend on Government Retirement Plans

At the present time, it appears that seniors will be able to depend on receiving some retirement income from their government. There will be changes. Some governments are phasing in later payments, for example moving old age payments from 65 to 67. This means you will have to work 2 years more before you can collect an old age payment. Also these payments are not always going to increase as fast as inflation and although it is nice to receive these payments, consumers must not rely on this income as their sole source of income.

Will My Money Last During Retirement

A common question by many consumers and the answer is that it depends on a lot of factors which you should discuss with a financial planner. These factors include:

Your age when you begin collecting
How long will you live
How much you take out each year
Will your investments do well over time

Many investment planners will suggest taking out 4% each year, investing conservatively and focus on income generation investments that are well diversified. As long as you do not have to withdraw a significant amount of money in a down market, chances are you may be able to have your money last well into your retirement.

When to Take CPP

CPP is the Canada Pension Plan. Many developed countries have something similar to the CPP. It can be taken as early as age 60 and delayed until age 67. If you take the CPP at age 60, there is a 35% penalty on average that is prorated if you delay taking the CPP in later years. There is lots of discussion and disagreement on when you should take the CPP. The break even age seems to be around 74 or 75. This means that if you take the CPP at age 67, you have to live until at least 75 to collect the money that you would have received had you started collecting at age 60 even with a major penalty. It really depends on how long you expect to live and whether you need the money now or can wait. The same applies to other government pensions in other countries, although the calculations will be different based on their local plans.

Transition to Retirement

Planning for retirement is a smart thing to do. Planning should definitely include your finances, but also your lifestyle and what you are going to do with your time. Â Start planning at least 10 years prior to retirement and if you can, transition into retirement by reducing the number of working hours and living on what you think will be your retirement income. This is a great way to get into the mind set of retirement.

How Much do You Really Need to Retire

Another tough question? Work related expenses are going to be less, but then leisure related expenses are going to be much higher at least in the initial years when you have your health to travel, play golf or whatever you plan to do. This question should be part of your financial planning. A financial planner can help you with this question by assessing your income from pensions and investments compared to your leisure plans, living expenses etc.

How Do You Know it is Time to Retire

Some people never want to retire. They enjoy what they are doing and the benefits of work too much. They enjoy being around people and they enjoy the challenge of work. Another group must work well past the standard retirement age just to make ends meet. They did not plan for retirement and they did not save for retirement. They might have lost a pension because of layoffs or company bankruptcy. A very tough position to be in for sure. If you finances are in place, if you have enough money to meet your living expenses and to meet your leisure activities, whatever they are, then it may be time to retire, particularly if you are not that excited about your job. This is a very tough decision and many people will retire from one job, make a career change and begin working at something they really enjoy.Â This is also a form of retirement.

Transition to Retirement – Retirement Checklists

There are many checklists that consumers can find on the internet and by talking with your financial adviser. We have some on this website. Not all items will apply to every individual. The important thing is to take these lists and use the items that apply to your situation, your life style and your financial situation. Take the time over a few months to work on these items to begin creating a plan for your retirement. With a plan you will be in a far better situation to deal with retirement and enjoy it much more as well.

Debt In Retirement

Should you have debt during retirement? Probably not, if you can avoid it. Most people will pay off their home and all major loans prior to retirement. Their income may be fixed and they have to live on this alone. Having a mortgage paid for frees up a great deal of money to utilize for day to day expenses and also for those extra things you always planned on doing while retired. Still there are many seniors with debt from credit cards or small personal loans. It is very important to learn to live on your income at this stage, since working is not an option for most people.

Retirement Plan Options

Companies develop strategies and contingency plans to help them manage their business and deal with surprise situations that could impact their financial health. Individuals should do the same thing. Plan for health, plan for sickness, plan for some kind of curve ball that could disrupt your retirement. Constantly evaluate and adjust your plans to reflect the situation that you are dealing with and plan for the future. This is just something that makes great common sense to do to ensure that you have options that are workable for you during retirement.

Diversification

the mantra of investing is diversification. Never place all of your investments in one investment, no matter how good it sounds, no matter how good the income is. The risk is just too great that something will happen to cause you a lot of grief and leave you devastated financially. For example, who would have ever thought that GM would declare bankruptcy? Millions of shareholders and investors lost their investments leaving many seniors as well without their life savings. It is bad enough to lose some of your money in this situation, but to lose everything is catastrophic.

Investment Advisers

Having an investment adviser is a good thing. They should be providing you with quality information and helping you make investment decisions. Protect yourself by also doing your own investigation. Talk to other advisers, talk to other investors, research your decisions and the recommendations of the adviser. After all it is your money and you are taking the risk, not the advisor. If it does not make sense, if you do not understand the advice, if you feel uncomfortable, then do not follow their advice. Get another adviser.

Transition to Retirement – Make Your Own Decisions

We believe that all investors and this includes people who are retiring with sizable nest eggs should be making their own decisions after having done their own research and seeking advice from their investment advisers. Sometimes it is wise to have several advisers just to compare investment strategies and recommendations. Bottom line if you do not understand or do not feel comfortable, then trust your instinct and look elsewhere.

Investigate and Monitor

Once you have invested your money for retirement, never put it away and forget about it. At least once a month, take a look at how your investments are doing, meet with your adviser once every 6 months to review the status and progress towards your objectives. Investigate changes to your investments and make adjustments as needed.

Reassess Your Plan on a Regular Basis

Meet with your adviser at least once every 6 months or more often if you have an active investment strategy. Review the income and growth levels of your accounts, update investment strategies, re-balance your account if needed and reassess how you are doing relative to objectives and your retirement plans. This activity will help you to ensure that the money for your retirement will be there when it is needed.

Stay Involved

Some people are just too lazy or they do not care or they have a false confidence in their adviser that they will do the right thing. We say, stay involved and informed relative to the markets, to your investments and to your trades. Never allow a trade unless you have approved it ahead of time.

Best Places to Retire

There are many places across North America to retire. Some are friendlier from a tax perspective and quality of life perspective. Bottom line is that we suggest to readers that they evaluate what is most important to them from a financial perspective and a quality of life perspective and then decide what makes sense to them for their situation. Family, friends, taxes, cost of living and quality of life are the important attributes that many people take into account. Health coverage and health treatment facilities are also high on everyoneâ€™s list.

Good Luck, Comments are Welcome

We have covered a lot of different topics on this post. You can find out much more on some of other posts that deal with each subject alone. The transition of consumers into retirement is a complex subject and consumers need to spend the time they need to make sure they achieve the equality of life they wish to have in their retirement.

Have a truly great, fun filled and rewarding retirement! Make your Transition to Retirement a successful one.

How Do I Know I have enough for Retirement

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This is the big question for many people who are thinking about retiring or are suddenly faced with forced retirement. How do I know I have enough for retirement? The sooner that you prepare for retirement the better off you will be, but how do you know when you have enough?

We all get accustomed to living on the salary or income that we make and this is probably a good starting point. This is the quality of life you are used to and the life style you have been accustomed to. So why not start there.Â We compiled the following points from reviews we have done looking at various posts and ideas from many sources. If you cannot meet these requirements, then you will have to take steps to either adjust your income in some manner or you will need to downsize your expectations. We will discuss each one in a little more detail.

15.7 times salary saved
Less 2 for social security
Less 2 for defined benefit plan
Or can you live on 5% of income from your savings
Some say2% or 4% of income from savings
Can you Still work
What will you do with your time

How do You Know You Have enough for Retirement

15.7 times salary saved

This is a standard that many financial planners are working with and it is a good measure to start with. The big assumption is that you want to maintain your current lifestyle. So if your current income is $50k per year, then you need $750 to $800 k in savings to ensure that you will have the income you need. Start at this level when calculating if you have enough for retirement.

Less 2 for social security

You can also make adjustments to this figure if you will receive social security. The common rule of thumb is to reduce the ratio from 15.7 to 13.7 if you will receive social security and decrease the overall savingsÂ that you need to have.

Less 2 for defined benefit plan

The lucky few who will have a defined benefit retirement plan can reduce the ratio a further two points. This is a combination of benefits for medical as well as retirement income from a pension plan. Many people are losing their benefits due to layoffs and downsizing. If you are near retirement, you need to evaluate the probability you will actually see these benefits when you retire.

Or can you live on 5% of income from your savings to have enough for Retirement

Another way to look at the question of whether you have enough for retirement is to ask your self if you can live on 5% of the income from your savings. For example if you have $500,ooo saved, can you live on 5% or $25,ooo a year. If you can make more than this consider it a bonus!

Many people would have difficulty living on this amount, however if you can addÂ social security and a defined benefit plan to this, it may not be so bad.

Some say2% or 4% of income from savings

The question of whether you can live on 5% of income from your savings really depends on whether you can actually make 5% or not. Some say that the average income is actually much lower at somewhere between 2% to 4%.Â What this really means is that you really need to have a lot more in savings if your savings is only generating 2% income every year.

Take a really hard look at what income you can generate from your savings. Be conservative in your assumptions. The stock market has been very volatile over the past few years so be careful with investments and the income assumptions you make. If reality is better than what you assumed, then it will be a bonus to you in your retirement years.

Can you Still work

Either way, whatever you assume, working full or part time during retirement years has a lot of benefits. Not only do you have the extra income which you may need after doing some of the calculations, you will have the opportunity to be challenged, to meet new people and contribute to your community.

These benefits will provide you with a more complete life and help you live longer as well.

What will you do with your time if your do not have enough for Retirement

As we mentioned in the last paragraphs, you will be busier and you will fill the time you have available if you work. The bottom line is to figure out what you will do with all of the free time you gain once you finish working full time and depending on your decision, the amount of money you will need as well.

Visiting family, looking after the grand children is far different than traveling the world on cruises. Many people who have traveled a lot have come to the realization that while traveling is nice, spending time with family and friends is much more rewarding.

For many the challenge is to find the right mix of family, travel and budget ! Do you have enough for retirement?

Retirement – Live Well on Less

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When do you have enough money to retire? What kind of lifestyle will you be happy with? Will you have to learn to live well on less money? These are questions that millions of baby boomers are asking all around the world and the answers are as varied as there are people on the planet. It is an intensely personal question and most people are stressed out to some degree about the answers.

Depending on your age you may have time to prepare. If you are still in you 40’s or younger, then you have time to prepare and save for retirement. We have a lot of posts on this site that talk about how to go about saving for and planning for retirement. But, what if you are 55 or 60 and suddenly are forced to retire due to health or downsizing at your company? You may not have saved enough money and must make a lot of decisions about what you will do going forward and the lifestyle you will lead. You can still have a wonderful fulfilling retirement with a lot less money than what you planned, as long as you adjust your expectations.

Retirement – Live Well on Less – Some Ideas

We have compiled a few ideas about this stage based on a combination or personal experience as well as from reading a lot of information on the web and talking with friends and colleagues. Let us know if this rings true for you and or if you have comments or suggestions.

You will have to cope with your situation, what ever it is. Here are six things to think about as you adjust to retirement and learn to live well on less.

Fine Tune your Budget
Turn Time into Money
Live Smaller
Move to a lower Cost Area
Work Part Time
Become Debt Free

Retirement – Live Well on Less – More detail

Fine Tune your Budget

Regardless of how much money you have or receive as pension income, you must balance your spending with this income. This is probably a first step were you take stock of how much money you will take in. You must match your expenses to this income.

You might have to take fewer vacations or different vacations than you planned. Perhaps instead of going on a cruise, a trip by car might be in order. You may have to down size or give up some of the things you took for granted. This is the time to really take stock of what you can afford.

Turn Time into Money

When we are working, we do not have the time to do our own repairs around the home, we do not have time to look for sales and find the best deals. We end up spending a great deal more money as a result. Friends of ours are like this and think nothing of spending money like it will never end.

Once we are retired and living on a fixed income , we have time to do all of these things. A friend once was amazed that I can go on a trip for less than half of what he and his wife paid. It really was quite simple. I looked for a deal and I also was flexible when IÂ traveled. As a result I saved more than 50% of the cost of the trip compared to my friend.

Look for sales on tools, clothes, food items, travel and whatever you are buying. You can save thousands of dollars by negotiating everything from hotels to furniture.Â Look for hotels that include free parking, WI-fi, breakfast and more when you travel.

Apply this simple concept to almost everything you do and you will be amazed at how much money you can save.

Live Smaller

Many people live in a larger home, especially when they are raising a family. Once the family is gone, they really do not need all of that space and cost over head. It may be time to find another home that has a lower cost overhead.

A smaller home will cost less to heat, to cool and to decorate. Taxes should even be less as well. Consider all of these things when you look for something that will reduce your monthly costs.

There is one issue that you must take into account. It does cost dollars to move. These include real estate commissions, legal fees, moving costs and decorating costs. If your savings will not quickly make up for these extra costs you may want to just stay were you are! Compare and make an informed decision before you leap.

Move to a lower Cost Area

Some areas of a city, state or province are known to be expensive, while others are known to be less expensive to live in. Taxes may be less, and the general cost of homes and utilities all may be less. Moving to these areas can also save you money.

We even know one couple who have purchased a home in Mexico because the cost of living is so much cheaper. If you do plan to consider something as radical as moving out of the country there are many things to consider such as immigration issues and health coverage.

Work Part Time

Many retirees are finding that they can make a little play money by going back to work full-time or part-time. This is an excellent way to enjoy your retirement, renew your social life at work, meet new friends and make a little extra money.

some people doÂ not care about the money. They just want somewhere to go every day and interact with people. Others have to work to make up for the income they have lost. Either way working can be good for you in many ways.

Volunteering is another approach to consider. Money is not a factor, since it is volunteer work you are doing. You are helping the community, you are meeting people and you are getting out several times a week. Many people are afraid of volunteering because it can quickly become a job without pay. The organization begins to depend on you and you feel guilty if you do not go in. Be firm and strike the right balance that works for you and your family.

Become Debt Free

Becoming debt free takes a lot of pressure off of you when you retire. This should be a primary objective for everyone. Just think that if you did not have that mortgage payment or that car loan, just how nice if would be to have that extra money to use for your personal needs.

Transition to one car, move to a smaller home,Â work part time , do whatever it takes to become debt free and enjoy the freedom of being debt free.