THINKING RETIREMENT – ANDY LANDIS-Some people don’t believe in retirement any more.  I frequently hear “I can’t retire because I don’t have $2 million…because I can’t live on Social Security…because the market is down…” and on and on.  Humbug!

The Ghost of Retirement Past will tell you, people have always retired, in good times and bad.  And the Ghost of Retirement Present says they still do. Some have plenty of money, some don’t.  But they find a way to retire, if that’s what they want to do…or are forced to do.

You need a retirement plan.  You need it if retirement is on your wish list.  And you need it as a contingency, even if you’re healthy and love your work, because your health or job could go south like Santa in January.

No one is going to leap down your chimney and stuff a retirement plan in your stocking.  You need to build it.  You don’t need a degree in sleigh aerodynamics to sketch a retirement plan.  You’ll simply be making a list and checking it twice.

Start by making 3-5 columns on a spreadsheet or on paper.  Label the columns two ways:  with ages that are candidates for retirement, like 60, 62, and so on; and with corresponding years, like 2013, 2015, and so on.

Now list any retirement income you have coming.  Get a Social Security statement at (easy registration is required).  Do the same with your pension(s), if any.  List your income estimates in the appropriate year columns, using either monthly or annual amounts.

Now add up all your financial assets, not counting your residence.  Project forward to your candidate years, including your ongoing retirement savings.   (You are saving for retirement, right?) You might also factor in very conservative numbers for asset appreciation, say 2-4% per year.  Sorry, but flying reindeer will not make your returns take off.

For each candidate year, multiply your assets by 3-4%, the most you can withdraw per year from a diversified portfolio.  Add the resulting asset income to your Social Security and other retirement income, converting to a monthly amount if that’s what you used before.

Do any of the income totals come close to meeting your current bills?  If so, you might be able to retire at that age.

If the numbers don’t work, put some “work” into the numbers.  What if you work part-time in retirement, either at your current job or at a job you’ve always longed to do?  Or what if “retirement” means a shift to an “encore career” with the perfect job or small business?  Add some realistic work income to your columns.                                                                                                                   If the numbers still don’t work, look at where Santa parks his sleigh–your current residence.  If you rent, could you move and pay less per month? If you own, think about tapping your equity.  Could you sell and either downsize or rent?  Is a reverse mortgage a possibility?

Also consider your current expenses, the toys under your tree.  Are there expenses you could reduce for the sake of retirement, like commuting, work clothes, lattes?

You don’t have to do all this alone.  Call in the elves.  This would be an ideal time to consult a financial planner.  See or to find someone to work with.

If you’d rather do it yourself, try running your numbers through a few online calculators.  Good ones include:

As you run the numbers, don’t forget to plan a great retirement life.  All the money in the world is pointless without a life worth living.  Two great resources are What Color Is Your Parachute for Retirement and my own book, When I Retire.

All this is a start.  You’ll fine-tune the plan going forward.

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