Your Big, Beautiful Retirement
Retirement is just another phase of your beautiful life. To achieve the lifetime of abundance you desire, you’ll need to be active in every way. We are living longer than ever before, which we need to account for when planning for retirement.
A woman reaching age 65 today can expect to live, on average, until age 86.6 and about one out of every four 65-year-olds today will live past age 90; one out of 10 will live past age 95.
We are choosing healthier lifestyles, we are thinking positively about our future because being confident and thinking positively leads to a more beautiful life! According to a recent survey of Baby Boomers by the American Association of Retired Persons, 40% plan to work "until they drop." However, through our WealthWise habits, we can better prepareourselves to retire at a happy and healthy age.
Whether retirement is many years away, a few years in the future, or you’re already retired, it’s never too late or too early to take control of your retirement. To fully engage in the retirement we are creating, we must put into place competent savings tools now. Time is our biggest ally! The moretime we have the more wealth we can amass – it’s that simple. Automating savings and the beauty of compounding goes to work for us.
For those of us in the early stages of planning your retirement, these are some great first steps to take:
- Create long-term goals, and start/keep saving!
- Contribute to your company’s retirement plan – 401(k), (or 403(b) for public educators and non-profits) or pension plan if they offer one, and DON’T touch it. You can contribute up $18,000 (as of 2015) per year into the 401(k) with pre-tax dollars that grow tax deferred until withdrawal. Some employers even offer a match – TAKE THEM UP ON IT! If you change jobs, leave your savings there or roll them into the new employer’s plan or an IRA.
- Put money into an IRA (Individual Retirement Account) – you can contribute up to $5500 a year with pre-tax dollars and retirement income withdrawn is taxed as income.
- Put money into a Roth IRA – Contributions are made with after tax dollars up to $5500 (this limit is applied to the sum of contributions to an IRA and Roth IRA) withdrawals are tax free.
- It’s never too early to find out about your social security benefits. On SSA.gov you can create a personal, secure account that allows you to review your yearly social security statements. This function is relevant to people of all ages. If retirement is far off on the horizon for you, you can use this function to make sure your yearly earnings are being properly reported. Monitoring this can help you accurately and promptly detect possible identity theft and fraud. If you are approaching retirement, SSA.gov gives you an estimate on how much social security you would receive if you retired at 62, 65 or 70. Knowing these figures can give you a better idea of when the ideal age would be for you to retire.
For those of us with retirement funds already set into place:
- Continue to contribute to the retirement plans stated above.
- Refine your retirement goals and expectations, including when you want to retire.
- Take inventory of all of your assets, savings and investments. In order to create a sustainable retirement plan, we need to look at assets such as retirement plans, mutual funds, annuities, insurance, stock and bonds and a host of other assets.
- Calculate and get a pretty good idea of what your expenses in retirement will be. Some expenses will increase in retirement, while others may decrease, but let’s focus on areas such as housing, food, transportation, clothing and personal items, healthcare, entertainment, and travel to name a few.
- The next thing to look at is income from all sources, which may likely be several. Social security, retirement accounts, funds, cd’s, savings, etc.
- The previous 3 will help us determine whether there is a shortfall or a surplus. If there is a shortfall, how can we balance or income and expenses to sustain our lifestyle?
Most importantly, feel free to ASK QUESTIONS! The more information you can obtain for yourself, the more options you open up. The underlying question is “How much retirement savings is really enough?” Retirement is anything but a fixed number or time period. There is no magic number, but understanding your estimated benefits and projected expenses will help figure out how comfortable we are with the difference in the two.
DIVINE ASSET MANAGEMENT LLC
39 Broadway, 36th Floor, NY, NY 10006
tel 212 344 5867 fax 212 509 5867
Dani Hughes & Valerie Sanchez
Co-Creators of Divine WealthWise Exchange