​Thinking about retiring? For many workers, retirement is the ultimate financial goal. It’s when you get to leave the working world and live life on your own terms. However, the timing is important. Retire too early, and you risk running out of money. Retire too late, and you may lose out on valuable years that you could spend enjoying yourself.
 
There’s no magic formula for determining the right time to retire. Finances should be an important consideration. So, too, should your health and happiness. You also may need to consider family obligations or perhaps other dreams you may want to pursue after you leave the working world.
 
Not sure if you’re ready? Below are a few questions to ask yourself as you make your decision. If you don’t know the answers to these questions, you may need to do some more planning. A financial professional can help you develop your strategy and solidify your retirement plans.

What will you do with your open schedule?
 
You’ve probably been looking forward to retirement for years, but have you given thought to how you’ll spend your free time? Many retirees initially enjoy their freedom but soon grow frustrated or bored. Some even suffer from depression or anxiety because they feel like they no longer have purpose.
 
Boredom can have financial consequences. You may choose to fill your free time with costly activities such as shopping, traveling and dining out. The risk is that you spend too much in the early years of retirement.
 
If you don’t know how you’ll spend your time in retirement, now may be the time to think about your options. It’s often helpful to write about your ideal day in retirement. How would you spend your time? What activities are most important to you? Think of ways you can enjoy retirement without spending excessively.

When is the right time to take Social Security?
 
Social Security is likely to play an important role in your financial picture. It’s one of the few retirement income sources guaranteed* for life, so it can provide much-needed financial stability.
 
Your benefit amount is largely dependent on when you file. You can file as early as age 62. If you file before your full retirement age (FRA), however, your benefit could be reduced as much as 35 percent.1
 
On the other hand, if you file after your FRA, you could increase your benefit. Social Security offers an 8 percent annual benefit increase for each year past your FRA that you wait to take benefits. If you can afford to delay your benefits, this could be a way to increase your retirement income.2
 
There’s no universal right answer on when to file for Social Security. Your decision should be based on your unique needs and goals. A financial professional can help you develop your strategy.

What’s your backup plan?
 
You may have a strategy for how to fund your retirement. As you likely know, however, plans are disrupted all the time. The market could take a downturn, limiting your ability to generate income. You may face serious illness or even a need for long-term care, and the related costs could drain your retirement assets.
 
What’s your backup plan to deal with these potential risks and others? You may want to talk to a financial professional about how you could better manage risk. For example, you could use an annuity to guarantee* your income or minimize volatility. You could consider long-term care insurance to reduce your out-of-pocket costs.
 
Ready to plan your retirement strategy? Let’s talk about it. Contact us today at Rex Financial Group. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
1https://www.ssa.gov/planners/retire/agereduction.html
2https://www.ssa.gov/planners/retire/1943-delay.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
17859 – 2018/7/31

According to a new study from Transamerica, Generation X doesn’t feel too confident about its chances in retirement. In a recent study, the financial company found that only 12 percent of those in Generation X feel comfortable about being able to retire. The average Generation X household has only $69,000 in retirement savings.1

Generation X is generally defined as those born between the mid-1960s and early 1980s. Most Gen Xers are in their 40s or 50s now, which means that while they still have time to save, retirement is approaching soon.
 
If you’re a Gen Xer and are behind on saving for retirement, now is the time to take action. The good news is you still have time left to accumulate assets and implement a strategy. Below are a few good starting steps to get you back on track:

Estimate your funding need.
 
Every plan needs an endpoint. Imagine if you started a road trip without a destination. You’d likely wander without making much forward progress. Your retirement strategy is no different. You need to know your end goal so you can track and monitor your progress.
 
In a retirement strategy, your end goal is the amount of money you need to save to fund your retirement. It’s based on your specific needs and goals and your expected lifestyle in retirement.
 
You can estimate your retirement number by developing a projected budget. List all your planned expenses and estimate their costs. Then add them up to project your total annual expenses in retirement. Assume that you’ll be retired for decades, and multiply your annual cost of living by an estimated number of years in retirement. That’s your total funding need.
 
During this step, it’s important to consider inflation. Your cost of living will likely increase throughout your retirement. Be sure to consider that as you estimate your savings goal. Also, you may want to consult with a financial professional to help you develop a precise funding goal.

Use a budget to save more money.
 
A simple budget may be the most powerful financial tool at your disposal. A budget helps you manage your spending and track your progress toward large financial goals, such as retirement. Unfortunately, nearly 60 percent of Americans don’t use a budget.2
 
If you’re among that group, now may be the time to make a change. List your expenses and look for areas to cut back so you can increase your retirement contributions. You may want to find ways to reduce your debt or cut spending on discretionary items like dining out or entertainment. Develop a budget and stick to it so you can maximize your savings.

Invest in your ability to increase your income.
 
Perhaps your most powerful strategy is to increase your income so you can save more for retirement. That may be easier said than done. However, you may have years or even decades left in your career. If you can increase your earnings and then put the extra income toward retirement, that will go a long way toward helping you overcome your savings gap.
 
Look for opportunities to advance and grow in your career. Perhaps you need to further your education or expand your skill set at work. Maybe you should consider freelance work opportunities to supplement your current income.
 
Ready to develop your retirement strategy? Let’s talk about it. Contact us today at Rex Financial Group. We can help you analyze your needs and goals and develop a plan. Let’s connect soon and start the conversation.
 

1https://www.thinkadvisor.com/2016/08/23/transamerica-survey-highlights-american-retirement/?slreturn=20180616152205
2https://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
17848 – 2018/7/30