As You Consider Your Future Retirement: Common Questions by Preretirees

by Jeff C. Johnson

Retirement planning

What’s new in retirement planning that I should consider?

A recent trend in retirement planning is the focus on maximizing Social Security Retirement Income by making the right claiming decision. Many preretirees are coming to appreciate the greater life income that can be created by delaying receipt of SSI past their Full Retirement Age.

In what ways has technology helped people plan their retirement?

Technology has provided financial professionals with robust planning tools that can help preretirees understand how confident they should be (or not be) with their future income in their life-after-work. These programs get more powerful and useful every year. If you are thinking about your retirement, see a trusted adviser to help you determine how confident you are in your income-for-life resources.

Is there a way to make retirement saving easier?

Saving and accumulating early in life is the very best way to realize the goal of a solid retirement life income. Investing before age 30 is an important first step to building up significant assets in retirement accounts. For those that begin their retirement savings plan mid-career, a much larger percentage of earned income must be channeled to savings accounts to meet retirement goals.

What is the best way for most Americans to accumulate money for a future retirement?

The most common savings tool is the so-called 401(k), a retirement savings plan offered by your employer (there are other plans that work in a similar manner). Using this account allows workers to “pay themselves first” and to make systematic investments each time they are paid. The money saved also accumulates in a tax-efficient manner, enhancing the compounding earnings within the account.

Is early retirement an option these days?

Early retirement is the dream of many people, and I recommend starting with these three steps:

  1. First, create a projected “Monthly Income Worksheet” and consider what expenses, including health care and insurance costs, might be. See pages 80–82 in The Extreme Retirement Planning Workbook, Second Edition.
  2. Next, I suggest carefully considering how you will use your life-after-work, where every day is a vacation day. More people than you might think are stumped at what they will do each day if they are not working. I use a “weekly worksheet” to help preretirees think about what they will do in retirement and to consider if they are really ready for the nonfinancial side of retirement. See page 10 in The Extreme Retirement Planning Workbook, Second Edition.
  3. I also recommend you consider how much more money you might have for retirement by working a year or more longer, to provide an extra measure of confidence before you retire. This is especially valuable for people that couldn’t create a convincing weekly time use calendar and might not be quite ready to retire. See pages 19–21 in The Extreme Retirement Planning Workbook, Second Edition.

Where should I start if I want to get more serious about my retirement planning?

There is an army of Americans in the workforce that need and want direction in their future retirement planning. For these people I wrote The Extreme Retirement Planning Workbook, Second Edition. It’s available in paperback and ebook on this website, and it is a valuable first step for anyone starting down the road to retirement.