Spending

Retire Early? 14 Snags (Pt. 2)

Retiring before age 65 remains the dream of many Americans. Our first article looked at your personal obstacles to early retirement, such as how you save. Here are more potential roadblocks to starting your golden years ahead of time.

Why Retiring Is Tougher Now

Today’s retirement may look nothing like your parents’ or grandparents’. People live longer, benefits grow thinner, and health-care costs rise. Review your financial situation and start planning early so that this new retirement doesn’t catch you unprepared.

Retire Early? 14 Snags (Pt. 1)

Who doesn’t want to retire early? Unfortunately, if you’re like many people you won’t be able to. Here is the first of two articles looking at 14 reasons that early retirement might elude you.

Some of the reasons involve how you handle money, but others focus on your mindset and expectations or on factors beyond your control.

Wise Retirement Withdrawals

Saving for retirement is one thing, spending those savings wisely another. One school of thought says you must withdraw consistently from your savings to simply avoid exhausting cash before you die. Another believes in adjusting withdrawals depending on changes in your later years. Which is right for you?

Best Retiree Cities, Financially

You’ve probably seen dozens of lists of places to retire in, but they seldom focus on financial factors, which are important when you live off your savings.

Due to warm weather, beaches and the absence of a state income tax, locations in Florida are heavily over-represented on most such lists – I even included one here. But I took the liberty of assuming that not everyone wants to live out their golden years in the Sunshine State, and broadened the list to cover the country.

Enough Money to Retire?

You don’t want to run out of money before you run out of life.  How much money do you need?

Great question. Here are others you want to answer along the way to saving for retirement:

How long will I live? Probably the hardest question in all of life – you have to think about your mortality and foresee advances in medical science. A life insurance company might tell you that at 65 you can expect to live about 20 more years. If you’re in good health that number is higher.

Vital Retirement Spending

Want to increase your independence in retirement? Save money? Live safely in your own home? Then spend on goods and services that will enhance your comfort, safety and health. For instance, buy a new car.

No, this isn't a scam or a seedy sales pitch. In certain cases, a new car can be a wise use of your retirement dollars.

Figuring How Long You’ll Live

How long do you think you will live? How long does your money need to last? If you’re like most people, you get this age wrong.

The consequence? Faulty retirement planning, overspending now and running out of money before you actually reach your true longevity. Or spending too little now, depriving yourself of a comfortable retirement before your death.

Your Retirement Checklist

Are you within a few years of retirement? Time right now to get your financial house in order and here’s what to include on your pre-retirement financial checklist.

401(k)s. You need to determine if you want to leave the plan and its assets with your soon-to-be-former employer, roll assets into an individual retirement account or take a distribution (the last choice likely results in a hefty tax bill).

30 Years For Retirement? Doubtful

A life expectancy of 30 years in retirement is a commonplace assumption these days. Funding a non-working life of three decades is a real challenge, however, and may lead to a lot of retirees scrimping needlessly – because they won’t live that long. The life expectancy for individuals is well under 30 years and while at least one member of a married couple may live that long, the odds that both do is actually quite small.

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