After a lifetime of work, it’s great to take a trip, help the kids, or get a new TV. But before you get what you want, make sure you have what you need. In 2011 the Financial Security Project of Boston College produced a Planning Guide for the Newly Retired that can serve as a workbook for retirement planning. The Guide outlines a 3-step process to determine how your financial needs are met. Get a copy of this workbook here.
- Define what you need. A reasonable place to begin is what you currently need each month to pay the bills. While spending on trips and entertainment declines with age, rising medical costs could push your monthly expenses higher.
- Add up what you have. Social Security and employer pensions and other income benefits can help pay your monthly expenses. Then there’s your savings and your house. You can draw an income out of these assets, hold them as reserves, or leave them to your kids or charity.
- Decide what to do. If you can pay the bills and are well-insured, have enough assets, or can accept the consequences of a bad medical or financial shock, you don’t have to do anything. If not, the primary options are to change the way you use your savings or house, return to work, or tighten your belt.
The quicker you act, the more secure your retirement will be. What you do makes a difference.
• Think and act long term, which we don’t naturally do.
• Plan for your survivor, which means thinking about death (and making a will!) .
• Assess your risks realistically, and have a plan if things go badly.
You can download the workbook below and consult with us to assess your situation and put a plan in place to be sure you get what you need.