By Sheryl Rowling
SAN DIEGO — Admit it – you’re worried about having enough money during retirement. Does this scenario describe you?
You’ve been working for decades. Your kids are grown and mostly self-sufficient. You’ve been contributing to your 401(k), paying off credit cards every month, and dreaming of the day you can afford to retire. But, now you’re concerned about rising health care costs, the volatile stock market, increasing interest rates pushing bond values down, and tax rates that will surely move up.
With all of this, how can anyone plan on retiring? There are some answers that go beyond investment advice (such staying diversified and rebalancing regularly). By paying attention to a few simple concepts, retirement won’t be forever out of reach.
1) Understand the basic math. If you retire early, you have less working years to save and more retirement years to pay for. It’s a double whammy! Working just one extra year gives you an extra year of savings and one less year of retirement spending.
2) Retirement doesn’t mean you will never earn money again. Let’s face it; we’re living longer and healthier. We don’t want years and years of eating bon-bons while watching soap operas on TV. We’ve honed skills, developed interests and have energy. So, many retirees will take on a “lifestyle career.” This can be a paying job, such as teaching or working at a golf course, or occasional self-employment, such as consulting or writing.
3) Home equity counts. The equity you’ve built up in your home is actually another asset available to you in retirement. Whether you finance your home over 30 years, downsize or take out a reverse mortgage, your home can be utilized to help fund your retirement needs.
Retirement doesn’t depend on reaching a certain number. It does, however, take planning. Be sure to consult with a qualified financial advisor to help you reach your retirement goals – whatever they may be.
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Rowling is a certified public accountant, personal finance specialist, and principal of Rowling & Associates. She may be contacted via sheryl.rowling@sdjewishworld.com