how to prepare for retirement?

Question

i am now 55yrs old

Answer 1

Dear Sir, this is a very deep question! There are so many ways in which you can prepare yourself -

1. Finances - Make sure your finances are strong so that even after retirement you are able to maintain the same standard of living. Make sure you will be economically stable and independent even after retirement. This means - invest wisely!

2. Emotionally - Here you won't have to do much; the moment you retire, it is like the final homecoming for you. From then on, you will become an indispensible part of the house just like the doors, windows and your wife have been all these years. Yes, you have been in the same family all these years, but from now on, you'll be more into the family than into anything else.

3. Socially - Start gathering contacts of all your friends since childhood. Once you retire you will have lot of time, when you can visit them all and refresh friendships which will make you feel socially secure.

4. Something for your wife - I would suggest that you start learning household chores! :D I know most Indian men hate to work at home. But think - after all these years you are finally getting retired from work - FREEDOM! But for your wife? She will have no difference in her work. In fact, she'll have greater work to do just cos you are at home! So make yourself available for simple, small things at home. IT IS NOT FEMININE TO WORK AT HOME! Unfortunately many Indians consider household chores as work for the females. It is not so! Moreover, it is one way of avoiding boredom.

5. Something for yourself - Start feeling happy! You are going to enter second childhood! A time when you can do anything with no one to question you! I assume most of your responsibilities of life would be over by now or will soon be over. So you'll be a free bird - free to do anything you want! So start getting involved in all your old forgotten hobbies - singing, stamp collecting, reading, writing, etc etc! You may also plan to start visiting places. Try to travel around - pilgrimages or simply fun trips! And if your financial position allows it, do go abroad somewhere (like singapore) with your wife.

You've worked hard the whole of your life for others; spend the last part for yourself. It's YOUR life! Live it to the fullest!

Answer 2

IF you have not already started socking away the funds you will need in some retirement savings account -- start NOW! Because ... Social Security is ONLY meant to be a SUPPLEMENT to the savings of those who work hard all their lives -- and NOT the total source of your retirement pensions.

Next: Pay down/off your mortgage AS SOON AS POSSIBLE - - the faster the better. The same with any other debts -- get RID of them as FAST as possible -- living within the budget of a Retirement Pension is hard enough -- but the difficulties multiply astronomically when you are carrying over debt from the time you were working, and ... now in Retirement, you have 1/2 of your income to pay down that debt -- OUCH!

REPURPOSE your space ... and Live BELOW your means ... the definition of successful Retirement is to live well below the Retirement Pension amount -- to not keep racking up debt, and make sure that your expenses are minimized too.

DO You have Health Care that will carry you well into your elder years -- and what about a Long Term End of Life Care policy? The younger you are to put permanent plans into effect -- the cheaper it will be in the long run - and that also means you need to look at your LIFE INSURANCE needs too -- a permanent Life Insurance Policy purchased at age 55 is much more to your benefit than trying to even qualify for Life Insurance (to cover your end of life needs/bills and provide for your surviving spouse/survivors)

Do you have any interests or hobbies or anything else you would like to explore AFTER retirement? Go to the local colleges and DO pick up the Senior/Retiree Catalogues -- and some do offer lower tuition/fees for those of us in the "Retirement Years" -- around where I live -- there are so many "Retirees" in the classes in the REGULAR College that about half the class is usually Retirees (who are doing this to stay active in mind and body) and the rest are a mixed groups of ages -- which is why the average age of the students is now 36 yrs of age!

THINK about where you are going to age in place -- and start making those changes now while you have full income. It will be much more difficult to afford those changes once your income changes due to retirement.

Also -- look at the property taxes, income taxes, and other taxes (including COSTS of living where you do now) -- are there any other locations that would be better for you taxwise or expensewise? IF so -- is it economically viable (a benefit to you) to relocate upon your retirement?

Look also at the available Medical Care in your Retirement Area -- it is going to be more and more important as you age.

Answer 3

There are many ways for you to plan your future retirement! If you havent started already, which I gather you havent, then I would seriously talk to a financial planner.

If you own a home, you might have a better chance. If you do own a home, you should speak with a mortgage planner! Create a mortgage plan that will integrate with your personal financial goal!

Answer 4

Know Your Retirement Needs

Retirement is expensive. Experts estimate that you’ll need about 70 percent of your preretirement income – lower earners, 90 percent or more – to maintain your standard of living when you stop working. Take charge of your financial future. Start by requesting Savings Fitness: A Guide to Your Money and Your Financial Future.

Find Out About Your Social Security Benefits

Social Security pays the average retiree about 40 percent of preretirement earnings. Call the Social Security Administration at 1.800.772.1213 for a free Social Security Statement and find out more about your benefits at www.socialsecurity.gov.

Learn About Your Employer's Pension Or Profit Sharing Plan

If your employer offers a plan, check to see what your benefit is worth. Most employers will provide an individual benefit statement if you request one. Before you change jobs, find out what will happen to your pension. Learn what benefits you may have from previous employment. Find out if you will be entitled to benefits from your spouse’s plan. For a free booklet about protecting your pension, request What You Should Know about Your Retirement Plan.


Top 10 Ways To Prepare For Retirement

Contribute To A Tax-Sheltered Savings Plan

If your employer offers a tax-sheltered savings plan, such as a 401(k), sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. Over time, compound interest and tax deferrals make a big difference in the amount you will accumulate.

Ask Your Employer To Start A Plan

If your employer doesn’t offer a retirement plan, suggest that it start one. Simplified plans can be set up by certain employers. For information on simplified employment pensions, order Internal Revenue Service Publication 590 by calling 1.800.829.3676. Or you can view a copy on the IRS Web site. You may also want to request a copy of Choosing a Retirement Plan for Your Small Business.

Put Your Money Into An Individual Retirement Account

You can put up to $3,000 a year into an Individual Retirement Account (IRA) and gain tax advantages. The chart below illustrates the way your account can grow in an IRA.

When you open an IRA, you have two options – a traditional IRA or the newer Roth IRA. The tax treatment of your contributions and withdrawals will depend on which option you select. Also, you should know that the after-tax value of your withdrawal will depend on inflation and the type of IRA you choose.

Don't Touch Your Savings

Don’t dip into your retirement savings. You’ll lose principal and interest, and you may lose tax benefits. If you change jobs, roll over your savings directly into an IRA or your new employer’s retirement plan.

Start Now, Set Goals, And Stick To Them

Start early. The sooner you start saving, the more time your money has to grow. Put time on your side. Make retirement savings a high priority. Devise a plan, stick to it, and set goals for yourself. Remember, it’s never too early or too late to start saving. So start now, whatever your age!

Consider Basic Investment Principles

How you save can be as important as how much you save. Inflation and the type of investments you make play important roles in how much you’ll have saved at retirement. Know how your pension or savings plan is invested. Financial security and knowledge go hand in hand.

Ask Questions

These tips point you in the right direction. But you’ll need more information. Talk to your employer, your bank, your union, or a financial advisor. Ask questions and make sure the answers make sense to you. Get practical advice and act now. Financial security doesn’t just happen. It takes planning and commitment and, yes, money.

Facts

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Today, only 42 percent of Americans have calculated how much they need to save for retirement.
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In 2001, of those who had 401(k) coverage available, 30 percent didn’t participate.
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The average American spends 18 years in retirement.

Putting money away for retirement is a habit we can all live with. Remember … Saving Matters!

To find out more, call the Employee Benefits Security Administration at 1.866.444.EBSA (3272) and request the following brochures:

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Savings Fitness: A Guide to Your Money and Your Financial Future [View]
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Taking The Mystery Out Of Retirement Planning [View]
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What You Should Know About Your Retirement Plan [View]
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Choosing a Retirement Solution for Your Small Business [View]
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Women and Retirement Savings [View]

The following Web sites can also be helpful:

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AARP
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American Savings Education Council
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Certified Financial Planner Board of Standards
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Consumer Federation of America
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The Investor’s Clearinghouse
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U.S. Securities and Exchange Commission

Answer 5

Enroll in your company's 401K pronto at the highest deduction they will allow. Start scaling down your lifestyle to better prepare for retirement.

Answer 6

Save as much as you can while still having a good life.
Estimate how long you'll keep earning and how much you'll need after you retire.
Invest your savings carefully -- some in stocks or mutual funds that own stocks, some in bonds or safer accounts.

Good luck and have fun.

Answer 7

Accept the facts. We have to live various stages of life and try to indulge in some social services that will ease the bore.