I am at or about to be at a big fork in the road and as such I’ve been asked five very important questions. These are questions that I have no idea how to answer. And even after talking to a couple of experts I am no further down the road in my resolution of a game plan. Although these are important questions and I need to be thinking about them, the questions are clear signals I’m soon to enter my golden years and I’m not ready for that. Quite frankly I hate that. Here are the questions:
How much longer will I work?
This is a tough one. I know I will always work at something. I may end up doing at the minimum consulting work. I know I will want to do more charitable work. But I’m not ready to give up a full-time regular job. I like my job. I find joy in it. And quite honestly, I like that I’m at a place in my career where I can hand down advice for the next generation. If I ever felt I was behind the times I would consider it time to throw in the towel. But I work at keeping up with the times and the technology. And knowing how long you will work and your earning potential is important for planning your retirement.
Motley Fool published this really helpful information, “the “4% rule” says you should be able to withdraw 4% of your retirement savings, and increase the amount over time to compensate for inflation, without fear of running out of money. So, if you have $500,000 in savings, plan to withdraw $20,000 of that in your first year of retirement. Divide this by 12 to determine your monthly-expected income from savings.
Now combine this amount with the money you expect to receive from Social Security and other sources to determine your total expected retirement income. If it’s not more than 80% of what you’re making now, then you may want to wait a few more years to retire — or be willing to accept a lower standard of living after you do.”
Where do I anticipate retiring to?
So this is different than the question above. This question is when I will fully retire versus working in some capacity even if it’s consulting. My mother is 86 and still volunteers in a hospital library several hours a day and multiple days. When she isn’t working she is sewing small, cloth animals to bring a bit of happiness to sick children at the hospital. I’m very much my mother’s daughter so I anticipate I’ll do something similar when I reach 70, which is the age I’ve determined I will quit working for good.
Bankrate published a list of the top cities in the U.S. for retirement. They created this list after looking at more than just fun things to do. They looked at crime rates and tax rates. I was not thinking about Florida but Kendall, Florida sounds delightful.
Do I need to update my will?
I have a will. I had it drafted about nine years ago. I put it in a drawer and haven’t touched it till recently when I was asked about it. I pulled it out and read and circumstances have changed so it needs updating. My children are no longer children, but are young adults so I think they are capable of being co-executors. But you can only have on executor for your living will? Which of them do I consider best suited for making the decision to pull the plug on me if necessary? These are all questions that will impact my will.
I approached the attorney who drafted my current will and she wants a minimum of $1,500 to update names and addresses. Seems crazy to me. I don’t have any special requirements so can I redo my will through LegalZoom?
Should I sell my home and downsize?
Social security may run out by the time I need it. Can I live comfortably without it? When should I sell my apartment and invest the money? Is it time to downsize? If I sold my apartment now I’d be able to pay off the mortgage and put that money towards retirement savings as well as the proceeds of the sale. I’d have to sell furniture and stuff, but I could bank that and I’m not attached to my stuff. A smaller place would also mean less monthly costs for utilities and air conditioning.
Do I need long-term disability insurance?
The past year has not been the best year for me health-wise. I’ve had four ambulatory surgeries plus herniated two disk areas in my back. I haven’t missed work really other than the day of the surgeries, but what if I did have something debilitating? How would I handle expenses? I read in the NYTimes that long-term disability insurance can cost as much as one third of your annual salary. Yikes.
These are all tough questions that I don’t have the answers for quite yet. Have you thought about any of these?