Money Monday

posted by Brian Thomas - 

 

TOPIC A: Budgeting / kids and money

Retirement can be a scary prospect if you go into it unprepared. And most times, all you see or hear revolves around making sure you have enough money to support your retirement lifestyle -- and yes, while that's a huge piece of the puzzle, there's also another aspect that you need to focus on that doesn't get a whole lot of attention: what are you going to do with all that extra time?

The reality is that it's difficult to go from a loaded work schedule to an existence devoid of structure, no matter how much you may be looking forward to your escape from the daily grind. 

In fact, retirees are 40% more likely than workers to suffer from clinical depression, and the reason boils down to feeling isolated, restless, and unfulfilled in the absence of a job.

That's why in addition to all of the financial planning you'll need to do for retirement, you'll also need to do some logistical planning. That means figuring out how you'll spend your days and whether you'll have the income available to meet those goals.

So how do you figure out what you'll do with your time? Start making a list NOW with an eye on the future. How many times have you thought to yourself that something sounded interesting or appealing, but you didn't have the time to do it? Write it down. 

Have you watched travel shows on TV and thought you'd like to visit some of those places? Write it down. What about a subject you'd like to take a course in, or a hobby you'd like to try? Write it down.

Plus, if you know what you're saving and planning for, you'll be more enthusiastic and conscientious about saving for it. What you thought of as saving for old age -- because you knew you had to -- becomes saving for a life that you look forward to living; a life of your own design.

If you still need time to figure out how you want to spend your retirement – or, indeed, you still need the paycheck — consider a phased retirement, which involves working a part-time schedule while beginning to draw benefits.

The benefits of doing this: You stay socially engaged, your mind stays more acute and alert, and you have ample free time to explore other opportunities. The additional income doesn’t hurt either.

Another option in retirement? An "encore career" — a job that blends personal meaning, continued income, and often involves some element of social impact. According to the research, these “post careers” or “second acts” tend to provide more satisfaction than previous careers.

In the end, there is no one-size-fits-all solution. Retirement can take a lot of shapes. But to have a "successful" retirement, you need to start thinking about your retirement life NOW.

HERE'S THE SM STRAIGHT TALK ADVICE

As you plan for retirement, make sure you have a plan not only for your money… but for your TIME as well. 


 

 

#2: Enquirer

Every Sunday, Simply Money is answering your money questions in the Cincinnati Enquirer.

Shelley in Fort Mitchell: Any suggestions for how to get my 84-year-old father to actually talk to me about his financial situation? He’s a very private man, and I’m afraid he’ll see my questioning as being too nosy. I just want to make sure he’s doing OK


 

 

#3: Social Security

If you make the wrong choices down the road when claim your Social Security benefits, you could end up leaving $300,0000 on the table! 

And that $300,000 is just about how much we think you'll need for healthcare in retirement

How? Because of wrong claiming strategies, like claiming your benefit too early, missing out on spousal benefits, and so on

For instance, we know at Simply Money Advisors that 2% of men start claiming at age 70 or older, 34% claim at full retirement age, and 42% claim early at age 62.

Women: 4% start claiming at age 70 or older, 27% claim at full retirement age, and a whopping 48% claim at age 62.

Here's the Simply Money Straight Talk: Claiming before your full retirement age, which ranges between 66 and 67 depending on when you were born, permanently reduces your benefits. Conversely, each year you delay from your full retirement age until you turn 70 will boost your benefits by 8%

Or, look at this way: when you're 81, would you rather have a normal check… or one that's 75% more?

So if you're single, it generally makes more sense to claim later. The exceptions are if you're terminally sick, your family has shorter life spans, or you just don't have any other money to live on.

But if you're married, things get more complicated - married couples have 81 different filing strategies! There are spousal benefits (including ex-spouses) survivor benefits… and neither the survivor benefit nor spousal benefits increase after full retirement age!

This is why you need to work with a trusted financial planner when trying to figure out when to take Social Security. Because no Social Security strategy is bulletproof - after all, you don't know when you (or your spouse) will die.

And always remember this: Social Security is technically NOT a "retirement" program. It is an "insurance" program designed to protect you from living TOO LONG and outliving your savings. Look at your Social Security taxes that you pay every month as your "premium."

HERE'S THE SIMPLY MONEY POINT

As you plan for retirement, understand that Social Security claiming strategies can get complicated. Work with a trusted financial planner to help you figure out the best options for YOUR needs.

TEASE TO SHOW

And we'll be talking more about this tonight on Simply Money at 6:43 right here on 55KRC.

 

 

Brian Thomas

Brian Thomas

Based in Cincinnati, OH, the Brian Thomas Morning Show covers news and politics, both local and national, from a conservative point of view. Read more

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