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Retirement Planning

barca-473854_1280If you are thinking about retirement, are you planning how you will spend your time or does retirement simply conjure up thoughts of not working? How will you fill your days when there is no backlog of projects on your desk, no meetings, no emails that absolutely have to be responded to immediately, no boss giving you deadlines and no need to leave the house most days?

What does retirement look like for you and your spouse? While you’ve been thinking about golfing and boating, is your spouse thinking about world travel or moving to a different city to be close to the grandkids? Couples don’t always have the same ideas about anything let alone how they will spend retirement.

When your dreams and plans for retirement are different, It’s time for some good old-fashioned negotiating! And remember this: Women tend to be gifted with a wonderfully sensitive intuition that is usually very accurate. Men tend to focus more objectively on the facts. The husband and the wife need each other to achieve the proper balance for a good decision. Many times the Lord communicates most clearly to the husband through his wife.

The husband and the wife should agree because they both will experience the consequences of the decision. Even if their choice proves to be disastrous, there are no grounds for an “I told you so” to drive a wedge in their relationship. For many people, the negotiations begin with a discussion of when to retire. One spouse may want or need to work a little longer while the other one is ready to call it quits. It’s important to talk, talk and then talk some more.

Talk about everything, including your expectations for retirement, your “want-to-do list” and your “need-to-do list.” Talk about what your new schedule will look like, how you’re going to divvy up tasks and how your identity is going to change. As you are going through this new stage and adapting to it, you have to use several basic social skills: Negotiate, compromise, take turns and share.

Here are some ideas for productive retirement discussions:

Each of you should create a list of categories and define what is important to you in retirement: Where do you want to live? How will you spend your days? Are you going to volunteer? What type of exercise will you do and how often? Are there any new hobbies you want to take up? Any new skills you want to learn? Are there sporting events or cultural activities you want to attend?

Once you each have your list, it will open the doors for more and more communication, sharing, compromise, agreement, and planning.

Many of the decisions are going to be based on your financial situation. Some people may have enough money to do what they’d like while many others are going to struggle to maintain their quality of life. Many people just think about various things that would be pleasurable, but they don’t sit down and calculate how much money it will take for them to do whatever it is that they are dreaming about.

There is another thing that people don’t plan for…and that’s life! What about the unforeseen circumstances? Sometimes, even when we have planned carefully, life just happens.

What if you have to leave your job sooner than expected? Corporate restructuring plans have a way of reducing the older employees and severance packages might not last as long as you would hope for. You will need to look at the income stream that is available to you and if it is enough to meet your needs.  After you have a handle on the money that is coming in and what you’re spending, the next step is to figure out a longer-term strategy to make ends meet on your new budget. If you have enough, you’re good to go. If not, you can look at some of the resources for retirees on limited incomes can use to help make ends meet until more typical retirement benefits become available.

What happens if you have to deal with a badly timed stock market drop? Everyone understands the stock market rises and falls in cycles over the years. Yet when it comes time to plan for retirement, this basic fact can be very hard to deal with. If the market drops right after you retire, you could find yourself with a far smaller retirement nest egg than you had expected. Easing back on your stock market exposure as you age can help insulate your assets from a falling market. Giving up some potential future growth and being slightly more conservative can offer a good solution to any unforeseen market moves that could put you in dire straits.

Retiring well takes effort, and dealing with unforeseen circumstances makes it even harder. Nevertheless, with some forethought, you can put yourself in the best position possible to deal with unexpected surprises and come out on top.

  1. Make sure you have a budget and know how much you are spending before you get to retirement.
  2. Make sure that you are saving for retirement, and not spending your disposable income on the next latest and greatest electronic gizmo.
  3. Concentrate on paying off all credit card and consumer debt as quickly as possible so that you are not taking this debt with you in retirement.
  4. Work hard to get your home paid off before you retire.
  5. Figure out how much money you will need to live on in retirement and calculate where that income is going to come from. Financial planners are very careful to try to keep you from withdrawing more than 4% per year from your savings. Know how much you will need and how much will be available from other sources such as pensions and Social Security. These other sources will help you to keep the withdrawals on your savings as low as possible.

The best time to start planning for retirement is now—even if you just started your first job. Sirach 31:19 tells us  “Do nothing without deliberation; then once you have acted, have no regrets.” You’ll have no regrets if you plan for retirement. Retiring with a plan and the funds to live that plan is a great blessing and a reward for a live well lived.  

Check out the retirement calculators on the Compass Catholic website: Retirement Calculators

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