RETIREMENT PLANNING

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Sure you like your job. But if you had the chance to retire early, say at age 50, would you sniff at it? "Pshaw. I love it here in my comfy Naugahyde chair." (Never mind the duct tape sticking to your pantyhose.) "I have a window!" (Facing a brick wall.) "My work is important." (So much so that you have to do it on an '89 Intel 386 that generates enough heat for a two-bedroom apartment?) "And look here in my top drawer -- a deluxe hole-puncher and all the paperclips I could ever use!" (No comment.)

For most people, a 30-year career is quite enough, thank you very much. But is early retirement realistic for you, Fool? Let's take a look.

At age 50, the government says you've got about another 33 years to live. Good grief! That's longer than your entire working career. With life expectancy increasing by leaps and bounds, you may want to think in terms of a 40-year retirement. Besides travel, golf, fishing, and classes in paperclip art, what else is on the agenda? How much will it cost? If you're at a loss, take a look at our post-retirement expense calculator on the Web that will help you figure out just how much it might cost. Will you have enough to do it all? How much has to come out of each paycheck to raise that stash? Good question! You might want to take a look at our planning-for-retirement calculator as well.

Have you thought about inflation? After all, peering out 20 years into the future you know that the $50K that looks like a good annual income now will certainly have to be larger to buy the same things then as it does today. But what's inflation going to be through the years? And that's just to get you to the first year of retirement. What impact will it have over the 40 years after that?

Where will you live? With luck, the mortgage will be paid off so all you have to worry about is property taxes. Maybe you'll even sell out and move into a smaller place in a sunnier clime. Sure beats having to shovel snow at age 70, even if it is further away from kith and kin. Besides, the kids can always come down for a visit.

You should think about insurance, too. You're probably insured under group policies through work for disability, life, and health coverage right now. In fact, your employer probably kicks in some part of or maybe even the entire premium for that insurance. Retire, though, and you will most likely lose that coverage. What happens to your spouse if you're inconsiderate enough to die early or (heaven forbid) become permanently disabled? If required to do so, how will you pay for a major illness or hospitalization and all of the attendant physician's bills? Forget about Social Security or Medicare. You're way too young for either of those to apply. And even if you did qualify, will the assistance be enough for a survivor and/or all the medical bills? If not, what alternatives do you have? And what about long-term care costs?

About now you may be thinking: "Hmmm, perhaps I should have a few more children to support me in my old age." Don't worry, Fool. You needn't sire enough offspring for a soccer team. Our advice? Never leave your job.

We're just kidding, of course. We're confident you can retire at a reasonably young age without having to populate the Dakotas or remain shackled to your desk. The trick is careful, Foolish planning. We'll take you step-by-step through the retirement planning process.

Retirement planning entails far more than just picking an age to do so and a beachfront property to do it upon. It requires a hard look at your lifestyle, your resources, and a whole host of factors that we tend to take for granted while we're working. Most, but not all, deal with money issues. As Fools, we face them head on.

Now, let's figure out how much you'll need to spoil yourself and your grandkids rotten in Step 2.

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