I Know I Want to Retire, How Can I Plan for It?

Our society pressures people to work longer, especially since life expectancy has increased and social programs like social security are strapped. If you are healthy and want to retire in your mid-60s, you must have all your financial ducks in a row if you want to maintain a style of life similar to your most productive working years - plus have a plan for the rest of your life. Though plans can go awry, you do not want to assume a vow of poverty in your retirement years. Similarly, you don't want to go from a life of purpose to a life without direction.

If you plan to retire, you must be sure of the "why." Are you just tired of the "old grind" and want a change? Are you planning to travel or live somewhere else part of the year? Are you planning on starting a business or devoting yourself to a cause you believe in? Any of these reasons will do, but if you retire just so that you can relax and have no schedule, you may be setting yourself up to feel bored and useless. Even if you don't have grand plans for your retirements years, you do need think of what your life would be like without work and make sure it will include some meaningful activity.



Having enough money is the biggest issue most potential retirees face. Ideally, you started your retirement planning early in your working years and regularly saved toward it, you will be able to have a comfortable post retirement life. You can have a zillion dollars saved and know actuarial statistics by heart, but the common marketing wisdom prevails: "your results may vary."

However, if you are 65 and plan to retire at 66, after earning an annual salary of $50k, plan on collecting $20k of Social Security, and want to maintain your standard of life, you will need $864,330 to retire at 66 and live until 90, or about $331, 300 if you live until 80. If you are 45 and looking ahead, you will need $936,650 to make it until 90 or $1.1 million to make it until 80. These figures are based on a retirement calculator from CNN Money, but there are many similar tools on the internet to deliver the staggering news about how much it costs to live into old age. The more you want to maintain your current style of living, the more you must have socked away.



Even if your goal is to retire earlier than the norm so you can pursue other things, you can do it through planning and good fortune. If you hope to realize this goal at a time when programs like Social Security are pushing back the dates, you must have a financial plan in place to assure that you can afford early retirement. Perhaps life got in the way of your saving as you should have. If you are facing retirement age with little or no savings and only the prospects of Social Security, you can still plan to retire from your full time job. You will need to pick up part time income and live more frugally that if you had money saved. While you are in good health, you will hopefully be able to save a little more toward your later years.

If you want to retire, you can make it happen. If you want to live the life you want, you need to amass the savings and the plan to make you post-retirement life worthwhile.