• Question
  • With the job market in the state it's in, would this be a good time to retire?

    Asked by someone from Memphis, TN on 1/28/2013

    With the job market in the state it's in, would this be a good time to retire?

  • Categories: When to Retire, Retirement Planning, Delaying Retirement


  • Editorial 


    San Francisco, CA

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  • It is unlikely that you should retire -- even if finding a job is tough. A few facts: Retiring in your sixties is a relatively new phenomenon. For most of our history, people either worked until they died or until they physically could not labor any longer. According to the Bureau of Labor Statistics, there has been an incredibly steep decline of over 65 year old men participating in the Labor Force.
    - In 1880 78 percent of men over the age of 65 were working.
    - In 2000 only 17.5 percent of men over the age of 65 were working.

    While a NEW Retirement still stands for relaxed golden years. We believe that it is necessary for the average retiree to reconsider their own retirement target date. And for those already retired, it may be critically important to your financial well being to go back to work in some capacity.

    And recent data suggests that this – retiring later and working in retirement – is indeed happening…

    However, the answer to the question about when to retire really has nothing to do with the job market and everything to do with your retirement plan. How old are you? How long will you live? Do you have enough money saved?

    Retirement planning is just like any other budgeting process. You need to balance income and expenses – both now and for the rest of your life. The trick is that you must somehow account for the unknowable element of longevity.

    1) Estimate Your Longevity: First you must estimate how long you and any other dependents (like your spouse) will live. Be optimistic when guessing about how long you will live. If your parents are alive and healthy at 85 -- and even if they are not -- you may well live that long or longer. There is a 50 percent chance that at least one partner from a couple in their 60s will live to the age of 95.

    2) Estimate Your Retirement Expenses: Next, determine how much money you will need each year – be sure to account for medical expenditures, dependent living situations and inflation.

    3) Tabulate Assets: Then, take stock of all of your assets – your house, savings, stocks, etc...

    4) Identify Retirement Income: You should also identify any income you will have in retirement – research your social security benefits, as well as any rental, dividend, pension or other income.

    5) Balance Income & Expenses: Finally reconcile your income with expenses.

    6) Guarantee Income & Safeguard Assets: Consider how to turn your income and assets into guaranteed income so that you do not outlive your retirement savings.

    If your assets can be stretched to create enough income to cover your basic expenses, you are in good enough shape. If they are not adequate, you will need to look for additional ways to reduce your spending and/or increase your income.

    The NewRetirement Retirement Calculator can help you with this retirement planning process.

    We wish you all the best!

  • Login to rate this answer:   Answered on 1/28/2013
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.