Deciding When to Retire Requires Goals and Budgeting

Determining what’s really important to you when you picture your golden years can play a major role in when you decide to retire. Deciding on the type of lifestyle you would like to enjoy, while sticking to realistic goals, is an important first step in planning. Once you have made a list of must-dos and must-haves, consider any obstacles that would get in the way of these things, including debts, future bills, mortgage, general living costs and health care.

Getting started
Base your retirement decision on the following factors:

      • Your health and potential health insurance benefits
      • Your life expectancy
      • Your eligibility for full Social Security and pension benefits
      • The amount of your savings
      • The way you and your family feel about retirement

Four important steps:

      1. Determine your retirement budget — Make a list of all the expenses you anticipate having once you retire. Including the cost of housing, utilities, food, clothing, etc. Keep in mind that your retirement budget may look a little different from what your budget is today.
      2. Determine your fixed retirement income — Factor in Social Security, a company pension and any other sources of income as well as your investment portfolio allocation. Total your income and subtract it from your budget.
      3. Determine how much you need to save before you retire — Your budget will tell you how much you need to have available. Multiply that figure by 12 to get the approximate dollar amount you will need each year.
      4. Determine the approximate length of your retirement — Consider the age at which you wish to retire and the length of the rest of your life. Look at your current health and family history to make an educated guess.

Healthcare costs

Keep in mind that if you want to retire early, you will need to cover additional expenses like healthcare coverage until you are eligible for Medicare.

Social Security benefits with age

It’s important to make an informed decision about when to apply based on your individual and family circumstances. Your monthly benefit can differ greatly based on the age you begin drawing on your benefits.

Following a simple graph can help you calculate what benefits you will receive according to the age at which you retire. If the lifestyle you envision requires a little more money, your retirement may need to be placed on hold for another year or two. Visit www.ssa.gov and check out their retirement planner.

Planning can equal peace of mind

Your retirement plan won’t be perfect, since you can’t foresee the future. You can, however, make your best judgments about future needs and investment returns, and use them to guide your saving and investing. You’ll feel greater peace of mind when you know that your savings are on track to take you to your goal.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016.

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