When it comes to our looming retirements, there's a lot to be scared about:

  • Your usual regular income suddenly disappears.
  • You suddenly have nowhere to go every morning.
  • You have to live off your savings.
  • Instead of watching your nest egg grow year by year, you'll watch it shrink.
  • You face many uncertainties, such as what health care will cost you in your golden years.

A recent New York Times article highlighted financial advisors Marcia Tillotson and Joy Kenefick, who help people prepare for retirement through a "boot camp." In a nutshell, it involves understanding your income and expenses, learning to live with less money, paying off your mortgage, and creating a list of goals and dreams for after you retire.

If you think it doesn't sound too hard, know that this boot camp lasts an entire year. The advisors say that about 80% of those who go through it end up deciding to delay retirement at least a little. (Just working two more years can make a big difference.)

A Foolish version
As I thought about it, though, I realized that those basic concepts are the same ones you'll find us talking about here at The Motley Fool. For instance, if you want to understand your personal income statement a bit better, here's one way you might do it on your own.

Spend several months recording every dollar you spend, so that you end up with a good idea of exactly where all your money goes each month. Do a little digging and include non-monthly payments, such as perhaps your home insurance bill and property taxes. Then figure out what kind of income you can expect in retirement, from sources such as Social Security, pensions, and your investment portfolio.

Now put on your retirement goggles and, while imagining yourself living in retirement, reconcile those two. See how much you think you'll need and how much you'll be taking in. You'll likely have to adjust your current spending, reducing items such as work clothes and upping items such as travel. If it doesn't look like you'll be able to fund your retirement with what you expect to have and earn, then make some changes pronto. Not only can you save and invest more, but you can do so more effectively.

Better investing
For instance, if you find yourself a bit behind, you might want to add a few more aggressive stocks, in the hope that one or two will soar. (But don't put too much of your money in aggressive stocks -- just a little.) If you're approaching retirement now, make sure that any money you'll want to tap within five years (and up to 10, if you're more conservative and risk-averse) is not in stocks, but in something more stable, such as CDs.

In addition, if you want to ensure a continuing stream of income no matter what happens to interest rates, think about adding healthy dividend payers to your mix. Here are some that are highly rated in our Motley Fool CAPS investor community:


CAPS Rating (out of five)

Recent dividend yield

Bank of Nova Scotia (NYSE:BNS)



Waste Management (NYSE:WM)



NYSE Euronext (NYSE:NYX)



Johnson & Johnson (NYSE:JNJ)






ConocoPhilips (NYSE:COP)



Hasbro (NYSE:HAS)



Data: Yahoo! Finance, Motley Fool CAPS.

Test yourself
I suggest that if you're close to retirement, you do prepare yourself for what it will be like, whether you do it on your own or in a more formal boot camp-style program. If you think you'll be living on $40,000 per year in retirement, and you're bringing in $60,000 now, then put much of that money aside, perhaps in stable investments such as short-term CDs or money market funds, and try living off just $40,000. See how much of a stretch it is. If it doesn't seem workable, then think of what adjustments you can make -- will you decide to rein in your travel plans? Or will you work a few more years to make more money to have in retirement?

Don't neglect the less-financial aspects of retirement, too. Sure, you'll still be going to work during this boot camp. But pretend you're not. Every day, jot down what you'd be doing instead of spending the day at work. If you find yourself running out of ideas, come up with new ones. You don't want to end up an unhappy retiree. You might want to keep working part-time in retirement, or look for a few new hobbies.

There no reason to be scared about retirement. As long as you know what's coming, you can get ready for what may be the best part of your life.