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Finding the Perfect Retirement Age

new report released by Bankrate.com shows that different generations disagree on the ideal age to retire. Americans, on average, seem to believe 61 years old is the best time to call it quits from the workforce. The report also found that younger adults tend to be more idealistic about their retirement goals. Gen Xers and millennials said their ideal age to retire would be 60 or 61, while older generations estimated that they would be ready around 64 or 65.

So, is that realistic? And how much would a person really need to have saved to make that a reality?

To answer this question, you may need the help of a professional like James “J.D.” Hoyt, founder and CEO of Ascendant Financial Solutions Inc.

Hoyt says there are a lot of unknowns in any retirement spending plan, plus people are living a lot longer these days, so retirees must plan for that.

“There is no perfect age, so it depends on the individual and the individual’s financial and emotional circumstances,” he said. “What kind of income do they need to maintain their chosen lifestyle? In that spending plan, they need to plan for basic stuff like what they have to pay for health care and any optional items that may or may not continue like traveling,” he said. “Will they travel for 10 or 15 years?”

There are line items that come in and out of a retirement budget that are important to account for like setting up a grandchild’s education fund or gifting to a church or charity, he said.

Then there are the unexpected events that need to be considered like the replacement of a roof on the house or replacing a vehicle.

And of course, taxes.

“Once you have an idea what your spending plan is going to be, you can figure out pretty quickly that if you need $5,000 a month and if you’ve got only $3,500, you might have to delay retirement or modify your expectation of retirement.”

But, he said, if people reach retirement age, they do not necessarily need to retire.

“If they are getting fulfillment from their job, retirement can leave a void in their life that is tricky to fill. People can work way past retirement because they want to,” he said.

That brings up the question: Are you emotionally ready to retire?

“What is retirement going to look like for you?” he asked.

Keep in mind that life expectancy is now in the middle 80s, so it takes much more planning than it did when life expectancy just a few short years ago was 63, he said.

It is possible that a person will spend as many years in retirement as they did working.

“If a client is going to retire and has no idea what to do with the 40 or 50 hours per week, how will they fill their day? I know many who will travel, volunteer, garden, but many don’t have any activity outside their work.”

Most of us get satisfaction from our job and when that piece of the puzzle goes away, it can leave a person empty. Even if a person is totally ready to retire, it can take about 18 months to adjust.

A retiree’s greatest fear is outliving his or her money, so the experts say people must also plan for the cost of health care and for long-term care if that becomes necessary.

“There are a lot of unknowns, especially those who retire before the age of 65,” Hoyt said.

“They should get all their ducks in a row as early as possible – within five years of retirement or earlier,” he said. FBN


By Patty McCormac, FBN

To learn more, contact Hoyt at jd@accendant-financial.com or call him at 928-774-9598.



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