Wednesday, November 07, 2018

By Barbara Pronin No matter your age, says retired benefits executive Richard Quinn, you're something of an anomaly if you don’t sometimes daydream about retirement. And if your pre-retirement lifestyle doesn’t reflect a view of what comes later, you could be pained by a sharp drop in living standards when the time comes to leave the workforce.

Quinn, who blogs about retirement at QuinnsCommentary.com, offers practical thinking you should consider now to avoid disappointment later:

Don’t count solely on Social Security. It’s probably secure, but it’s designed to replace no more than 40 percent of your pre-retirement income—and for some, that’s an overestimate, because the benefits are skewed to favor lower-income Americans. If you think you may need to work part-time, consider the options now.

Plan ahead. Have a financial and estate plan that provides for your spouse and others who depend on you financially, and who may outlive you. Annuities, investment income and life insurance may all be part of that plan.

Consider the non-financial aspects. If you’re thinking of relocating in retirement, try it out now. If you haven’t already, spend a long vacation in the region, checking out medical, leisure and lifestyle options. And remember, if you're thinking of traveling, it takes money.

Be alert to employer communications. What you don’t know can hurt you, and a missed deadline can do damage to your financial plan. Pay close attention to payroll and savings alerts from your employer.

Make retirement savings a priority. Put if before other goals, such as college costs or a vacation home. Unless you have a good pension in addition to Social Security, funding retirement is mostly up to you. Save as much as possible as soon as possible, because compounding is powerful—and over-saving early can help you through unforeseen bumps in life’s road.

Know that taxes may not be lower later. All the signs point to higher taxes for everyone, so prepare for no relief in that matter.

Consider the cost of healthcare. Medicare plus supplemental insurance can cost even a healthy retired couple more than $700 a month—and those monthly premiums are likely to grow, along with prescription costs.

Invest in ways that provide a steady income stream. Don’t be totally exposed to stock market fluctuations. You want a steady flow of income in retirement. A good financial counselor can help you ensure that.

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