07/ 09/ 2004
by Vicki Gerson
Most business owners want to retire one day, but do you know what you want to do when you retire? Regardless of your age, sit down and brainstorm your ideal retirement dream.
In order to make your dream come true, it is now time to plan. Here are some major factors to consider.
When do you want to retire?
This is one of the most important questions you need to ask yourself because you need to figure out if your financial needs will allow you to retire at the age you want. Do you want an early retirement, which would mean retiring at 65 years of age when you receive full social security benefits, or delay retirement as long as possible?
Retiring early sounds great, but do you have the financial resources necessary to do this? Right now certificates of deposit are hardly gathering any interest, your stock portfolio may have lost money and your mutual funds aren’t growing as quickly as you’d like.
Now is the time to total up your total assets; include the value of your home, but remember you still need to live somewhere. If you sell your home and take the profit, will you purchase a less expensive place or keep the same standard of living?
After you’ve added up your assets, determine your living expenses. Once you remove the business expenses, add up your costs and then consider expenses for more travel.
Another factor to consider is people are living longer. It’s not unusual for people to live into their 90s. Will your assets support you that long?
Retiring at 65 will provide you with full Social Security benefits; however, few people can live on those benefits alone. Once again, you need to evaluate your savings to determine if you can completely retire. At 65 you will also receive Medicare benefits to help pay your medical expenses. Most people who retire also pay for a Medigap policy to cover the expenses Medicare doesn’t.
Today, you will notice that many people 65 and older have part-time jobs to supplement their income. You find them bagging groceries, greeting customers at department stores, working as ushers at ball parks, caring for children and even taking tickets at the movie theater. Taking on a part-time job is something you should consider when making your retirement plans. Decide if this is an option that interests you.
Waiting to retire will stretch your retirement savings. When you retire later, your savings can grow for a longer period of time, and your Social Security benefits will increase as well. However, some people do take their Social Security benefits at 65 and continue working.
Where do you want to live?
One of your most important questions is where you want to live when you retire. If your home or condominium is entirely paid for, living expenses are quite manageable. You might also consider staying in the same neighborhood, but moving to a smaller, less costly home.
Another option is to move to a retirement community. You can use the assets from the sale of your home to move to that community. Oftentimes, retirees relocate and move closer to their children and grandchildren, or move to a warmer climate.
As a senior there are basically three levels of living:
- Living independently in your own home or a retirement community. In a community, there are activities, housekeeping and some meals.
- Depending upon your health, you may need to live in an assisted living facility with support services for personal care and medication management. Another option is to have a caregiver in your home assisting you.
- A nursing home is for seniors who need long-term health care.
Living in an independent retirement community or building depending upon the region of the country or city can range from $1,500 a month to $3,500 a month. Assisted living facilities can have monthly bills of $3,000 to $5,000 per month, while nursing home care can start at $200 per day.
Unfortunately no one can predict their physical condition for their senior years, so it is important to plan for the future.
Your future
Dreaming about wonderful vacations such as an Alaskan cruise, traveling to Europe or New Zealand is wonderful. But if you want to make these dreams a reality, and make sure you can afford your retirement years, start planning today.
