Retirement requires a lot of planning and consideration. In addition to finances, you need to think about when and where you’ll retire. Experts advise that you may need as much as 80 percent of your pre-retirement income to continue your current standard of living. The exact amount will depend on your individual needs.
Questions To Ask Yourself before Retiring
As you plan retirement, consider these important questions:
- At what age do you plan to retire?
- Can you participate in an employer’s retirement savings plan? This includes 401(k) plans and traditional pension plans.
- If you have a spouse or partner, will they retire when you do?
- Where do you plan to live when you retire? Will you downsize, rent, or own your home?
- Do you expect to work part-time?
- Will you have the same medical insurance you had while working? Will your insurance coverage change?
- Do you want to travel or pursue a costly, new hobby?
Tools to Help You Prepare for Retirement
To begin planning for your retirement:
- Get tips for building your retirement savings in the Department of Labor’s (DOL) Top 10 Ways to Prepare for Retirement (PDF, Download Adobe Reader).
- Use a retirement calculator to find out the best age to claim your Social Security benefits.
- Compare the pros and cons of receiving pension payments monthly or in a lump sum (PDF, Download Adobe Reader).
- Social Security pays benefits that are generally equal to about 40 percent of your pre-retirement earnings. The Social Security Administration helps you estimate your benefits.
- Learn from Investor.gov how you can boost your retirement savings.
- If you have financial advisors, talk to them about your plans.
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Teaching Suggestions
- Ask students if they have considered saving for retirement yet? If not, encourage them to start saving at least 20 percent of their income towards retirement.
- Do you know what sources of income will be when you retire? How much to expect from each source, and when?
Discussion Questions
- Why is it important to start planning for retirement while you are still in college?
- What are the easiest ways to boost your retirement savings?
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