The idea of retirement is a powerful one. For most people, retirement is a time to enjoy the fruits of a long and productive career, and to spend more time with family and on long-neglected hobbies. But the decision to retire is not always an easy one to make. And the adjustment from full-time work and professional obligations to a life without those obligations can be harder than many people think.

In fact, making the decision to retire should involve consideration of a number of different factors, and asking yourself a handful of important questions.

Here’s how to know when you’re ready to retire.

• You Won’t Miss Working. As a threshold matter, you’ll know that you’re ready to retire when you won’t miss working. Don’t take this question lightly, though. Even individuals who complain about their jobs find that once they’re no longer in the same routines, they miss those same jobs. Rather than going from full-time employee to not working at all, consider finding a way to transition into a part-time or consulting situation where you can see just how much difficulty you may have in leaving your job.
• You Have a Good Reason to Retire. One of the biggest mistakes that many older Americans make is simply retiring because they’ve reached a certain age. Retiring before you’re ready can ultimately prove to be a very frustrating decision. After all, many individuals derive great personal satisfaction from their jobs, so leaving that situation simply because they reach age 65 can leave a significant void in their personal lives.
• You’re Unable to Work. Of course, the opposite situation holds true as well. If you find yourself unable to continue performing at a satisfactory level at your job, then it may be time to retire. This may be from burnout, as well as no longer being able to physically perform the tasks required as part of the job. In fact, despite increasing life spans, the later years of life aren’t always of the highest quality. In fact, it’s becoming increasingly common that retirees aren’t able to work as long as they wish.
• You’ve Saved Enough. You can be confident that you’re ready to retire once you’ve reached your retirement savings goals. Determining what’s an appropriate amount to save depends on a number of different factors, including your current income, your financial goals, and your other financial obligations. This process is one that you should revisit periodically, particularly if there are significant changes to your professional or personal situation.

The process of retiring is not something that happens in a single day. Nor is it a single decision that can be made easily. Consider the factors above when trying to decide whether you’re ready to retire.

The post How to Know if You’re Really Ready to Retire first appeared on Retirement Advice | RetirementAdvice.com.

The notion of retirement is still a relatively new one in human society, and the ways that we define retirement are continuing to change at a relatively quick pace. No longer can a person just prepare a simple retirement plan when they first enter the workforce, then just work to follow through on plan without revisiting or readjusting it along the way.

Every individual needs to make themselves familiar with the various trends and developments that are occurring in the marketplace.Here’s a sampling of some of the current retirement planning issues that you should consider when creating and updating your own personal retirement plan.

• Employees Can’t Always Control Their Work Situation. The realization that the Social Security the retirement benefits system won’t provide most individuals with enough to live on during retirement, combined with most employers doing away with traditional defined benefit plans, has led many to bridge their anticipated financial gap by planning to continue working into their retirement years.
• Fraud. With current retirees unable to generate much income from safe investments such as bank CDs or government securities, many will explore non-traditional investments as a way to help them pay for retirement. This opens the door for an increasing number of fraudsters to pitch risky and untested investment opportunities, and the trend has continued to become more of an issue in recent years. Be sure that you take a very close look at any investment you’re considering making, and to consider enlisting the help of a trusted financial professional.
• The Increased Need For Long Term Care. Life expectancies continue to creep upward. Unfortunately, these increases don’t always correspond to good health. Numerous studies have found that a the typical 65 year old couple can expect to pay well over $250,000 in out of pocket medical and health-related expenses over the remainder of their lives.
• The Rise in Alzheimer’s Related Issues. Alzheimer’s Disease in becoming more prevalent in retirement-aged individuals. This can not only create a greater need for long term care, but it also requires a greater degree of involvement in the affected individual’s personal financial matters by that person’s spouse or loved ones. New retirees would be well-advised to create wills, medical directives, powers of attorney and similar legal and financial documents, to eliminate any uncertainty as to their wishes if they should ever fall ill.
• The Do-It-Yourself Mindset. Whether it’s fear of fraud, the desire to save on fees, confidence in one’s investing abilities, or some combination of other factors, many are approaching retirement with a do-it-yourself mindset. There are plenty of high quality financial tools and services available to help you with your retirement plan. Just be sure to choose wisely, and remember that low fees should never be your sole basis for choosing one option over another.

By keeping these emerging trends in mind, you can be confident that you’re doing everything you can to ensure your retirement success.

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The U.S. Social Security Retirement Benefits program remains one of the most important ways that retirees in the United States will be able to pay for their living expenses later in life. Recent research has shown that most Americans have not been successful on building their own retirement nest eggs.

Less than half of US households have any retirement savings at all, and even the median nest egg size for individuals close to retirement (age 55 to 64) is only about $100,000. But Social Security can also be confusing to many. Part of the confusion arises from the fact that there are so many myths surrounding the program.

Before I go through the myths and facts about collecting your social security benefits be sure to create an online account with the Social Security Administration (SSA). You can create an account with the SSA at https://secure.ssa.gov/RIL/SiView.do. To create an account you’ll need an email address, your social security number, and a U.S. mailing address. Once you’ve created your account you can review: estimates of your retirement, disability, and survivors benefits; your earnings record; and the estimated Social Security and Medicare taxes you’ve paid.

Now let’s take a look at some of the most common areas of misunderstanding.

• Myth: It’s Always Best to Wait Until Your Full Retirement Age Before Taking Benefits. One of the most common myths about the Social Security program is that it’s always best to wait as long as possible before starting your benefits. It’s true that the longer you wait before starting to receive benefits, the larger your monthly benefits check will be for the rest of your life.
• Fact: The Timing of Benefits is a Highly Individualized Decision. In fact, the best choice for when to begin receiving your Social Security retirement benefits depends a great deal on your overall financial situation. You may have the opportunity to delay benefits until age 70 if you have a sizable nest egg. But if your retirement savings are modest, you may need to begin taking Social Security early, if for no other reason than to have the financial security to remain in your home and make sure you have adequate health insurance.
• Myth: You Need Your Own Work Record to Claim Social Security Retirement Benefits. It’s true that most individuals will become eligible to claim Social Security Retirement benefits by virtue of earning wages or salary for at least 10 years.
• Fact: There is a Spousal Benefit Available Under the Social Security. However, even if you don’t have enough work experience to claim benefits on your own, you can still claim a spousal benefit that amounts to 50% of the Social Security retirement benefit your spouse receives. Note that your spouse must have elected to begin receiving their benefit in order for you to claim the benefit.
• Myth: You Can’t Have a Job and Receive Social Security Benefits. This myth has begun to fade away, but many individuals still believe that you must stop working in order to receive Social Security retirement benefits
• Fact: You Can Still Work During Retirement. The truth of the matter is having a job won’t impact your eligibility for Social Security, although the amount you earn can impact the extent to which your Social Security benefit checks are taxable.
  

  Make the best decision for yourself and your spouse with respect to your Social Security benefits by taking your own needs, circumstances and situation into consideration.

  
  

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The best way to give yourself the greatest chance to retire with a sufficiently large nest egg is to plan ahead. Among other things, this means to start saving as early as possible, to save consistently and try to maximize your contributions every year, to invest in a way that matches your investing personality, and perhaps even to set a target retirement date.

However, even if you successfully execute every aspect of your retirement plan, your personal situation may change in ways that might cause you to rethink the age at which you want or plan to retire.

So when might it be appropriate for you to change your target retirement date?

• When You Want to Work Longer. If you’re fortunate enough to love your job or career, then there’s certainly no reason to stop doing what you love simply because you reach a particular age. If you still derive personal satisfaction from your job or career, then you may choose to keep working past the target retirement age when you were younger.
• When You Provide Financial Assistance to Your Children. Because many individuals are waiting until later in life before they have children, those individuals will have financial obligations with respect to those kids, even as they get closer to retirement age. In addition, many people choose to continue providing financial support for their children as the children graduate college and enter adulthood. In either case, a person may decide that it’s appropriate to adjust their target retirement age forward to account for those expenses.
• When Your Nest Egg is Underfunded. Unfortunately, this is probably the most common reason that someone decides it’s appropriate to adjust their target retirement date. If you haven’t been able to save enough money to have a well-funded retirement account, continuing to work makes sense, if you prioritize making additional contributions to that account.
• When You Want a Particular Health Insurance Option. While employer-sponsored health care insurance options look very different than they did a few decades ago, you may still find that you’re able to get the best insurance coverage at your job. Because health care related expenses are often the single-largest cost of retirement, keeping a valuable insurance policy in place might be essential to meeting your overall financial goals.
• When You’re Eligible for Valuable Benefits. In addition to the availability of employer-sponsored health insurance coverage, your employer may offer other valuable benefits that would be prohibitively expensive for you to replace if you left the workforce.

All the situations we’ve discussed thus far relate to adjusting your target range out to a later date. But if you’ve exceeded your financial assumptions and prior expectations about retirement savings, then you may decide to retire earlier than you originally planned; just be sure to approach that decision with a more conservative approach going forward so that you don’t outlive your nest egg.

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It can sometimes be easy to get stuck in unproductive patterns of behavior when it comes to personal finances. That’s often the case when it comes to retirement savings. A person finds a reason not to contribute to their retirement fund for one year, and then the next, and soon they’ve become accustomed to foregoing retirement contributions entirely.

We know that not making regular retirement savings contributions can have a devastating impact on your ability to retire comfortably or perhaps even to retire at all.

If you believe that you may be behind schedule when it comes to planning for retirement, here are some tips for how to jump start your savings.

• Use Your Tax Refund. Many individuals struggle to come up with the money to make a maximum contribution to their IRAs each year. Fortunately, most people have a readily available source for a significant portion (or perhaps even all) of that contribution in the form of their tax return. Consider depositing your full tax refund check (up to your annual contribution limit) into your IRA as soon as you receive last year’s check. This gives you an immediate jump start on building a large retirement nest egg.
• Set Up a New IRA to Receive a New Account Opening Bonus. Provided that you are eligible to do so (which will depend on whether you’re covered by an employer-sponsored plan, as well as your level of income and whether you file a joint return with your spouse), you can jump start by setting up a new traditional IRA account and receive whatever new account bonus your local bank or a discount broker may be offering. Even if you’re only eligible to make a Roth IRA contribution this year, the long-term value of doing so is significant.
• Start Now. If you don’t find any offers or bonuses for opening a new account, you should still make your next retirement contribution immediately. Don’t wait until the end of the year, and don’t wait until it’s convenient or easy for you to make a contribution. Start the process of opening a new account tomorrow. This may come in the form of a new IRA, or perhaps beginning to make contributions to an employer-sponsored plan if you’re eligible but not currently participating.
• Take Advantage of All Employer Matching Funds. If your employer-sponsored retirement plan (the most common of which is the 401(k)) offers any type of matching funds, then start making contributions large enough to receive all of the matching funds that are available. Even if the investment options that are available in the employer-sponsored plan are not ideal (in terms of investment focus or fees), you’re still likely to have a stock or bond index fund-type investment available to you. The value of the no-cost employer matching funds is almost certainly too great to pass up.
• Automate Your Retirement Savings. You can jump start your retirement savings by taking away the opportunity for you to not save. Set up an automatic savings plan that makes monthly or quarterly transfers from your checking and/or taxable investment accounts into your IRA.

Besides the advice above, virtually anything you can do to boost your rate of savings will end up paying off many times over by the time you’re ready to retire.

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The process of planning for retirement is a long one. Ideally, you should begin thinking about retirement on the day you start your very first job. In the early stages of your career, save as much as possible towards retirement, this will make some of your future decision easier to make.

Planning for retirement is highly individualized. The general process of retirement planning and saving is going to be the same for most people, but the specifics and details of a retirement plan are going to be different from everyone.

Here are five decisions you’ll need to make before you retire, in order to help you decide upon the best way to reach your goals.

• 1. When Do You Plan to Retire? The first decision to make is when you plan to retire. This might be a specific date or year, or it might be keyed to achieving certain goals or milestones in your career. You might also determine that you’ll retire once you accumulate a particular amount of money. The important thing with having a target for retirement isn’t necessarily what that target is, but that it gives you a basis for creating a plan to achieve that target.
• 2. Have You Saved Enough For Retirement? Next look at how much you’ve saved for retirement. Obviously you’ll look at your dedicated retirement savings accounts, such as your IRAs and your employer sponsored plans, such as 401(k)s. Also look to other savings accounts and assets you may have that aren’t specific to retirement. You might not necessarily consider these other accounts to be part of your retirement nest egg, but once you enter retirement you’ll use these assets to fund your living expenses in the say way you’ll use those dedicated retirement accounts.
• 3. Where Do You Plan to Retire to? Once you retire, do you plan to live in the same place you’re living now? Or do you have plans to move someplace new? The answer to this question has many implications. Will you want or need to downsize to a new home? If so, how will you handle all the other aspects of changing your primary residence.

• 4. What Type of Lifestyle Do You Want to Have in Retirement? In order to make solid plans for how and when you’ll take distributions from your various accounts, you’ll need to make sure they align with the lifestyle you envision.
• 5. What are Your Estate Planning Goals? Finally, ask yourself what you want to happen with the funds in your retirement account after you pass away. Different types of retirement accounts have different advantages to passing down your account to heirs. Making sure your beneficiary designations are always up to date is a great place to start.

The decisions you make in response to the questions above should be revisited from time to time, to make sure that your retirement planning and savings activities are always on track.

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But in order to be successful, you’ll also need to do planning in the short and medium time frames as well, and constantly balance these efforts with your long-term planning.

With that in mind, here are five ways you can save for retirement over the course of the next five years.

For example, contributions to a traditional IRA might be tax-deductible in some years, and you have to weigh this against the potential long-term benefits of a Roth account. Furthermore, contributions to a 401(k) plan may be particularly valuable if your employer matches those contributions, but this may need to be balanced against a limited choice of investment options.

The most important principle to building a large nest egg is maximizing the time for your retirement savings to grow. The value of a $1,000 deposit to an IRA at age 25 will be significantly larger at age 65 than the same deposit made at age 45. Use the next five years to boost your retirement savings to the greatest extent possible.

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The differences between the traditional employer-provided and today’s individual driven retirement plans can be significant. In general, the biggest difference is that one is essentially a “defined benefit” retirement plan, while the other is a “defined contribution” retirement plan.

Let’s take a look at these differences in greater detail.

Of course, having a defined benefit plan generally does not preclude someone from saving additional amounts towards their retirement. In general, whatever type of plan you have access to, the most important thing is to plan ahead and make regular efforts to save.

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Regardless of a person’s individual situation, the chances are good that virtually every person approaching retirement understands that they need to make sound financial decisions in order to put themselves in the best financial shape. Even with such a wide range of financial scenarios, there are still some retirement concepts that apply to virtually everyone.

Here is some retirement planning advice for baby boomers to consider.

Retirement saving should be one of the highest financial priorities for every person, regardless of their age, occupation, or other financial obligations. This is true even when you’re in your 50s or 60s. Don’t feel overwhelmed with the amount you need to save in order to reach your target nest egg. Save to the best of your abilities, and continue making sound financial decisions at every step along the way.

For instance, for every year that you delay retirement from your full retirement age (up to Age 70), your monthly benefits amount will increase by 8%. If you’re in good health, then delaying your benefits for just a few years can result in receiving significantly more retirement income over the course of your retirement.

If you’re married, then you may wish to consider the “file and suspend” strategy under which one spouse begins to take their benefits, which triggers their spouse’s eligibility for the Social Security spousal benefit, then the first spouse suspends their own benefits so that they can continue to receive the 8% deferral credit. This strategy can be complicated, however, so you may wish to consult with a financial expert to make sure you’re doing it correctly.

Similarly, you might continue working past your target retirement age. Even working at a part-time job can bring in much needed income, help to keep you active and healthy, and generally improve your overall quality of life.

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Unfortunately, some people choose one of the other based on misinformation. Before deciding if a Roth IRA is better, or a Traditional IRA is the way to go, it’s important to know how to compare the two. Then you can begin to ask yourself the questions that matter and impact your present financial situation, as well as your financial future. It is a good idea to consider the pros and cons of Roth IRA before you decide.

The Pros of a Roth IRA

The Cons of a Roth IRA

In order to make a good choice with regards to a Roth IRA, it is vital to consider the pros and cons. Many people prefer the Roth IRA, but it’s clearly not for everyone. Your retirement goals, current income bracket, and future income can make a difference in how you save for retirement.

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