1,500 milligrams daily from foods or supplements. So to reach your optimal health, make sure you’re taking in calcium. Foods plentiful in calcium include whole grains, leafy green vegetables, and nuts. It’s also often helpful to get some calcium from chewable calcium-citrate tablets.
Chapter 3
Developing a Retirement Plan
In This Chapter
Many folks dream about retiring. No more racing to catch the commuter train or beat the worst of rush hour traffic. Say goodbye to long, endless meetings about topics for which you have little or no interest. Instead you’ll have plenty of free time to do the things you can rarely find the time and energy to do while you’re working. It sure sounds appealing, doesn’t it?
Although many folks dream about retiring, few are preparing. A survey conducted by the Employee Benefit Research Institute regarding Americans’ planning for retirement found that:
✓ Only about 64 percent of working adults surveyed are actually saving for retirement.
✓ Of those who are saving, 69 percent have a nest egg of less than $50,000.
✓ About half of survey participants simply guess at the amount of their retirement needs.
We think your future plans are important enough to deserve more than a guess! But we understand that your free time is valuable to you and that you have more interesting things to do than number crunching to determine your retirement needs. So in this chapter, we promise to provide plenty of retirement planning insights and tips without spending gobs of your time. Before we dig into the financial part of planning retirement, though, we discuss some general retirement topics that are as important or even more important. You need to have a firm grasp of these items as well.
Retiring sounds so appealing when you’ve had a frustrating stretch at a job you’re not particularly enjoying. But some folks really enjoying working and aren’t eager to have wide-open daily schedules day after day, week after week. Deciding when to retire and what to do in retirement is an intensely personal decision. For sure, there are many financial and personal considerations and questions, and we thoroughly address them in this chapter.
Even when you’re healthy, the job market may not be. Your employer could suffer financial hardship and reduce its workforce. Or maybe you’ll be lucky enough to retire early (even though it’s unplanned) because your employer offers you a buy-out package that’s too good to turn down. Or worse, you may lose your job with little notice and few benefits.
Ideally, when caught in one of these situations you would obtain another job and continue it until your planned retirement age. Unfortunately, events may not unfold that way. The economy, the job market, and your age could work against you. Finding another job, at a compensation level you’re willing to work for, may not be possible.
Even when you leave a full-time career voluntarily, you may plan to work part time for a few years. Or you may assume that if the first years of retirement are more expensive than planned, you could return to work at least part time. Yet a part-time job you assumed would be easy to find may not be available at all or may be available at a much lower level of pay than you expected.
The Society of Actuaries conducted some interesting focus groups with folks early in their retirement years. They honed in on people who had investment portfolios of at least $100,000 and who needed that money along with their Social Security and pension benefits to meet their retirement expenses.
Most of these people didn’t consult advisors and plan all that much for their retirement. Instead, they were more concerned with quitting work by a particular age. A number of focus group participants commented that their retirement decision came down to a “feeling” that they could swing it. Consider these comments from three different retirees:
✓ “I thought you were supposed to retire when you are about 65, and thought I would try it.”
✓ “I never sat down and thought I am 59, and in 30 years I’ll be 89. Have I allocated enough for 30 years? I never did that. Theoretically I should have.”
✓ “We take it day by day. I can’t worry about what is going to happen tomorrow.”
The focus groups also found that retirees were spending more than they expected on entertainment and travel, prescription drugs, and gas. It also wasn’t unusual for retirees to overlook inflation. And finally, although retirees were concerned about the potential for high medical and long-term care expenses, they did little planning around those expected expenses.
The lesson to be learned from all this is that you must have realistic expectations and proper assumptions when planning for your retirement. For more about managing your expenses in retirement, see Chapter 6.
Most people have a long-term financial goal of retiring someday. For some, doing so means leaving paid work behind entirely. To others, simply cutting back on work or doing something completely different on a part-time basis is most appealing.
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