Preparing for an Excellent Retirement

Retirement 4When I first heard the Beatles’ “When I’m 64” it seemed like it would be forever before I got there. But here I am. Eligible for Medicare and Social Security. Where did the years go?

 

Now that we’re nearing retirement, it’s time to make sure that we’re properly prepared. That’s important. Retiring when you’re not prepared can be costly. And, unfortunately some financial mistakes cannot be easily corrected.

 

Estimate Your Retirement Income

 

Your plans call for a comfortable lifestyle. An occasional meal out and a visit to see the grands at least once a year. And that costs money. Have you estimated your expected income and expenses after retirement?

 

Begin with your income. For most of us that could include a pension, Social Security, income from savings and retirement accounts (401k, IRA) and perhaps some part-time income. It’s easiest if you figure everything in annual/yearly amounts.

 

Start with your Social Security income. Their website has an has an estimator <https://www.ssa.gov/benefits/retirement/estimator.html> that’s helpful. You’ll want to have your prior year’s earning amount handy when you visit their site.

 

Add to that any pensions you may have earned. Some may pay you in a monthly check from the pension fund. Others will purchase an annuity for you which will pay a regular income. The pension administrator will be able to tell you how much to expect.

 

Ask your financial advisor how much you can expect to get from your savings and retirement accounts. Traditionally it was assumed that you could expect to earn/spend 4% on your investments without depleting the principal. But some advisors have begun to question that assumption and use different calculations.

 

You may choose to work part-time. Either because you need the income or because you’d be bored without work. Do a rough estimate on how many hours you’ll work each week and how much you’ll earn per hour. Then multiply by 52 to get an annual estimate.

 

Estimate Your Retirement Expenses

 

Traditionally it was assumed that you’d spend less in retirement than you did while you were working. The rule-of-thumb estimate was that you’d spend between 70 and 80% of your pre-retirement expenses. Many planners still use that as a fair estimate.

 

But some suggest that with more time to spend on hobbies and travel that retirees could actually spend as much or even more than they did when working. You’re in the best position to know what lifestyle you expect after retirement. And that puts you in the best place to estimate your post-retirement expenses.

 

Start with your present expenses for a year. Then make the appropriate adjustments.

 

Review Your Estate Plans

 

Much as we’d like to think that we’ll live forever it’s time to recognize that’s simply not true. And that we need to make provisions for the end of our life or a time when we cannot care for ourselves.

 

If your affairs are simple it’s tempting to attempt to do-it-yourself. But this has some serious downsides that might not become apparent until it’s too late. It’s not as simple as writing “I leave everything to _____” on a napkin and signing it. There are laws to follow. And they’re not the same everywhere. Some inheritance rules are different in each state.

 

You may think that “everyone knows” that you want your car to go to Junior, but that might not hold water with the department of motor vehicles when he tries to reregister it. And banks, credit card companies and other financial institutions can be sticklers for following the rules.

 

Incapacitation is another issue. The laws saying who can make decisions for you if you become incapacitated are complex. Failure to follow them could leave you dependent on a state appointed guardian to make decisions for you. I prefer to have someone I trust make those decisions for me.

 

As a general rule you’ll need the following documents:

– a will providing instructions as to how your assets are to be distributed.

– a durable power of attorney listing on can act on your behalf

– health care power of attorney authorizes someone to make medical decisions for you

– living will states your wishes for life-sustaining measures if your prognosis is terminal.

 

In some cases, if you have a need for privacy or your affairs are complicated you may want to explore a Revocable Living Trust.

 

Spend a Little Time Learning About Retirement Finances

 

Retirement is a big change in your life. And a big change in your finances. In most cases the biggest change since you entered the workforce.

 

Not only will your income and expenses change, but Some financial issues will take on a new urgency while others fade in importance. This is not a time to put your finances on autopilot and assume that everything will work out for the best.

 

There is one big difference in retirement finances that can affect every decision you make. Unlike when you’re younger and working you do not have time on your side. Some decisions cannot be undone and a mistake could seriously affect your retirement lifestyle or your estate.

 

It’s wise to seek wise professional counsel and read quality information sources. Both will serve you well in this stage of your life.

Also, check out How to Use Your Emergency Fund In Retirement

 

author’s bio: Gary Foreman is a former financial planner and has shared sound personal finance advice since 1982. He founded <a href=”https://www.stretcher.com/index.cfm?KimHoward“>The Dollar Stretcher.com website href=”https://stretcher.com/subscribe/subscribeAFF.cfm?Kim Howard“>After 50 Finance newsletter</a>. Also by Gary Foreman: <a href=”https://www.stretcher.com/stories/18/18jul23c-how-to-use-emergency-fund-in-retirement.cfm?KimHoward“>How to Use Your Emergency Fund In Retirement</a>

 

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Planning a Successful Career-Related Move

If your company is relocating to a new city or a different state, you may be forced to uproot your family and move to an unknown locale. So what can you do to prepare yourself and your loved ones effectively in order to avoid stress and to save both time and money? Depending on your situation, here are a few tips for a smooth relocation, courtesy of KJH Financial Services.

Relocate Your Business

If you’re a business owner and are relocating your company to a different state, you’ll need to re-register your LLC or corporation. To avoid costly lawyer fees, you can file the paperwork yourself or use a formation service that will help you understand and follow the rules applicable in your state, as well as obtain all the licenses and permits you may need to legally operate.

Try to plan your move several months ahead and get in touch with a local accountant to review your paperwork and inform you of possible tax incentives, as well as to prepare for unforeseen expenses. And if you need to find a new brick-and-mortar location for your business, spend some time in your new city to find a neighborhood where your target market likes to shop and find retail space in that area that fits your budget.

Additionally, if the new job isn’t what you were hoping or planning for, don’t panic. There are plenty more opportunities out there! To give yourself an advantage over the competition, here’s a free resume builder that you can use to professionally highlight your skills.

Find a Place to Live for Your Family

In an ideal world, you would have plenty of time and opportunities to visit your new state or city, explore different neighborhoods, inquire about the best–and worst–schools in the area and find the perfect home for yourself and your family. But sometimes, a career-related relocation leaves you with barely enough time to pack. So try to optimize the time you have by doing a lot of research based on the needs of your family.

If you have school-aged children that will be enrolled in public institutions, find a house or apartment located in the school district that best suits your children’s educational needs. And if you’re concerned about spending too much time away from your loved ones, find a rental home close to your new place of employment to reduce your commute time. Two bedroom/two bathroom homes in the Boston area start at around $2,400 per month, so do your research. Certain areas are more desirable than others, especially when you take school districts into account. Once you know the area better, and if you want to put down roots in your new city, you may start looking for a place to buy.

Create a Budget for Your Moving Costs

Some companies will offer to pay for some of your relocation costs, so make sure you keep all your receipts handy. Contact a few moving companies in your area and have them come to your house in person to assess the cost of moving your household to a different city or state, and get several estimates in writing. You may be able to save money by packing your belongings yourself, but make sure to allow enough time to do so, and don’t forget to keep track of how much you spend on packing boxes, tape, and bubble wrap for your fragile items.

When creating your moving budget, be sure to include upfront costs such as internet, utilities, rent, and security deposit, as well as your travel expenses like gas, hotel accommodations, and meals. It adds up pretty quickly. Make a list of everything that will need to be turned off at your old house (cable, gas, electricity…) so you don’t end up paying providers you no longer need and don’t forget to notify the post office, your bank, and your insurance company that you are moving.

Relocating can be a wonderful thing if you’re looking for a change of scenery, but make sure you and your loved ones have a soft place to land. That means making sure that your kids have great schools to go to, that you live in a safe neighborhood, and, if you’re a business owner, that your company can thrive in its new location.

Building your career requires many strategic moves and a lot of work. If you’d like guidance on the financial planning aspect of your growth, contact KJH Financial Services. We can help you manage your money and invest in ways that will secure your future. Visit us online to learn more.