Retirement Planning Activities: Are You Doing More or Less than Average?

retirement planning activities

Most of us have done some kind of retirement planning activities.  In fact, according to a recent study from Vanguard, only 1 out of 10 pre and recent retirees have not done any planning at all.

However, not everyone is tackling the same retirement planning tasks and few of us are creating a really comprehensive plan. Keep reading to find out exactly which questions people are tackling as they transition to retirement — questions are in order of popularity…

60% of Pre Retirees Have Figured Out: “When Should I Retire?”

Figuring out the big date is the most planned activity.  It makes sense, you can’t retire without setting a date unless an injury or other event prevents you from working any longer.

The average retirement age seems to be around 65. According to a 2013 Gallup survey:

  • 37% of nonretired Americans say they expect to retire after age 65
  • 26% at age 65
  • 26% before age 65
  • The most notable change over time is the increase in those expecting to work past age 65 —  37% this year up from 22% a decade ago and 14% in 1995
  • Meanwhile, the percentage of nonretirees who say they expect to retire before age 65 has declined to 26% from 49% in 1995

58% of Pre Retirees Tackle this Retirement Planning Activity: “When Should I Start Social Security?”

While many retirees are researching the best time to take benefits, the lure of getting Social Security checks as soon as possible is still quite high.  Most experts recommend that you delay the start of benefits in order to maximize your monthly pay.

Explore 7 Insider Tips for Getting the Most from Social Security or use the break even Social Security calculator to figure out the best time to start your benefits.

57% of Pre Retirees Calculate: “Amount of Monthly Retirement Income Needed”

If you want to have a secure retirement, knowing how much income you need each month is one of the best retirement planning activities to have addressed.

Of course, getting this right can be complicated.

Some experts say that you should plan on spending 85% of your pre retirement budget.  Others suggest that your expenses will increase when you first retire, then slowly decrease until you start spending a lot of money on healthcare near the end of your life.  However, each of us are unique.  It might be more realistic for you to actually think through your own plans in 3 or 5 year increments and budget each year appropriately with wiggle room for unforeseen circumstances..

  • The NewRetirement retirement planning calculator enables a lot of customization — you can easily plan for different spending levels throughout your retirement.

55% of Pre Retirees Answer: “How Much Do I Need to Retire?”

It may seem crazy that a full 45% of people are retiring without knowing whether they have enough money or not.  However, while most people think that having a treasure trove of savings is the key to a secure retirement, many retirees are quite successful by just making it work with what they have.

No looking before these retirees leap.

In fact, the Vanguard study found that people felt far better and more confident about their retirement situation after they retired than before. They also felt less

  • Uncertain
  • Anxious
  • Confused

47% Have Planned Whether or Not to Work in Retirement

Retirement jobs are increasingly popular. And, there are so many benefits to working in retirement — income, social connections, intellectual stimulation, sense of belonging and purpose, and more.

In fact, an AARP study reported that almost half of their respondents planned to have retirement jobs and be a working senior into their 70s or beyond.  Have you thought about working in retirement?  The kind of job? Hours? Pay?

46% Have Concerned Themselves with Managing Government Health Care — Medicare and More…

Almost everyone signs up for Medicare at age 65.  However, this benefit will not cover all of you needs.  Out of pocket expenses for healthcare are sizable and figuring out the best way to minimize the expense is confusing.

According to Fidelity’s Retiree Health Care Cost Estimate, a 65-year-old couple retiring in 2016 will need an estimated $260,000 to cover health care costs in retirement. This is a six percent increase over last year’s estimate of $245,000 and the highest estimate since calculations began in 2002.

However, a recent survey found that 38% of workers who are 50 and older reported they are not saving for health care costs.

43% Have Thought About Drawdowns and/or Generating Retirement Income

Turning your assets into income is one of the most critical retirement planning activities.  You have spent your life saving, now you need to figure out how to withdraw it so that you have enough for as long as you live — no matter how long that turns out to be.  Studies show that retirees who report having guaranteed income that exceeds their spending report less stress and an overall happier retirement.

42% Address How to Manage Investments After Retirement

Ideally you have been focused on saving money every month and investing in a way that has grown those investments as much as possible.  After retirement, most experts suggest that you shift your mindset to be about preserving and using that money.

Many advisors recommend that retirees hold their money in ways that are less risky.

Less than 35% Create a Plan for Long Term Care, Taxes, Estate or Home Equity

Each of these subjects are critically important for a complete retirement plan, but very few people are addressing them:

Long Term Care: About 70% of of people who turn age 65 will need some type of long term care in their lifetime, according to the U.S. Department of Health and Human Services, but few are prepared to pay for that care and it can be prohibitively expensive and is not covered by Medicare.  Explore creative ways to fund a long term care need.

Taxes: The importance of worrying about taxes in retirement may depend on your wealth, where you live, how you get income and other factors.

Estate: Everyone should think about their estate plans — whether you have wealth or not — there are documents that can make the end of your life better for you and your heirs.  Know about the 4 estate planning documents everyone needs.

Home Equity: Many people have more wealth in their home than savings.  It is therefore important to consider your house as part of your overall retirement plan.   Should you downsize now and use the money to help create retirement income?  Or, would it be better to wait and sell the home if you ever need long term care?  The ways to tap into your home equity are endless and can mean the difference between a stressful and stress free retirement.

The NewRetirement retirement planning calculator lets you model all of your housing options to see the impact on your overall retirement plan.

Get All of Your Retirement Planning Questions Answered

The best retirement planning calculators can help you get all of the answers to all of these questions — making it easy to be far better than the average retirement planner.

NewRetirement has created a comprehensive and highly personalized tool.  Forbes Magazine calls it a new approach to retirement planning and it was named a best retirement calculator by the American Association of Individual Investor’s (AAII).

Start answering your retirement questions



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