A comfortable and secure retirement is every worker’s dream, yet for many people, thinking about it can be overwhelming. Retirement is a goal to be relished, and the key is to be prepared. Answering these questions can help you figure out if you are ready to retire or not.
If you haven’t started to think about it yet, now is the time to figure out how you would like to spend your days in retirement. Will you be traveling? Playing golf? Volunteering your time? Maybe start your own business? Having a clear vision will assist in calculating the finances you will need to live comfortably while enjoying your days in retirement.
With advances in technology and medicine, Americans are living longer. According to the Social Security website, the average life expectancy for a man turning 65 today is 83, and for a woman it is 85. This is an optimal time to meet with a Financial Advisor who can assist in building a diversified portfolio designed to help provide for long term growth while keeping pace with inflation. Do not forget to budget for increasing health care costs.
Social Security is your first line of defense against outliving your savings as your payments will continue for the rest of your life, however, you may want to consider delaying taking payments until age 70 to receive 76% more than if you collect at age 62. Paying off your mortgage prior to retiring will eliminate one of your largest monthly bills and allow you to tap into your equity in cases of emergency. Talk to your Advisor about what percent of your savings you can withdraw annually during retirement. Disciplined investors may be able to gradually draw down their savings in a way that will likely last as long as they live.
Achieving the dream of a comfortable, secure retirement is much easier when you plan your finances. Engage your spouse to envision how you each plan on spending your later years and how you will finance your activities. Deciding together now will make you both happier in the long run.
**Any information presented about tax considerations affecting client financial transactions or arrangements is not intended as tax advice and should not be relied upon for the purpose of avoiding any tax penalties. Neither Bank of America, Merrill Lynch nor its Financial Advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions or arrangements that may have tax, accounting or legal implications with their personal professional advisors. Bank of America Merrill Lynch is a marketing name for the Retirement Services business of Bank of America Corporation (“BAC”). Banking, trust and fiduciary services are performed by wholly owned banking affiliates of BAC, including Bank of America, N.A., member FDIC. Brokerage services are performed by wholly owned brokerage affiliates of BAC, including Merrill Lynch, Pierce, Fenner and Smith Incorporated (“MLPF&S”), a registered broker-dealer and member SIPC. Merrill Lynch makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) and other subsidiaries of Bank of America Corporation. Investment products: Are Not FDIC Insured, Are Not Bank Guaranteed, May Lose Value, MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation.
Subscribe today for free to receive our weekly update and never miss an article.