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Armchair
Millionaire Community Bulletin: Working Your Way Through Retirement
Working
during the retirement years is an appealing option for many people
but if that’s your intention, be realistic about how much income
a working retirement could bring in. Plan for that lifestyle just
as you would any other retirement goal and recognize that may need
to support your lifestyle with money you save today using retirement
accounts.
New
York, New York (PRWEB) September 13, 2005 -- The oldest of the baby
boomers are on the verge of retirement, so lots of people are thinking
hard about how they’ll spend their retirement years. And many of
them plan to work, at least on a part-time basis. A survey conducted
by Merrill Lynch earlier this year found that 76 percent of those
surveyed plan to do some kind of work during their retirement.
Our
own recent survey of the Armchair Millionaire community found that
many are planning active retirements that include a variety of jobs.
Here are three comments we heard:
“I'd
like to travel a lot when I retire, but I'd also like to work part
time--not at my current job--but something slower paced and more
fun!” --Kristi
“I
plan on spending my retirement giving back. I'd like to volunteer
work in the area of special education. I'll maybe do a little consulting
to have extra money to help others but for the most part I will
continue with the work I love but will be doing it without pay.”
--mmyers
“Health
permitting, I plan to work part time at a book store (I'm in IT
now) and do some traveling. I hope working part time is out of interest
rather than necessity, but plan to use the small income to live
off of and avoid withdrawing from my retirement savings.” --YJ
It’s
easy to dream about how you’ll send those golden years. It’s entirely
another to make those dreams come true. An important step is being
realistic about how much a retirement job will really contribute
to your overall retirement needs. Use my reality check to ensure
that you’re on the right track.
The
Armchair Millionaire’s Reality Check for Working During the Retirement
Years
Will
it really be enough? Many people figure that a part-time income
will be sufficient to meet expenses during retirement. But tread
carefully here. Sure, you’ll have a social security check coming
in, but will that be enough to make up the difference? (Hint: If
you’re living paycheck to paycheck now, as many Americans do, your
honest answer will have to be “no.”) If you’ll come up short, consider
other income sources, such as a reverse mortgage to tap your home
equity, and downsizing to reduce your expenses.
Will
you really command as much in the job market as you think? That
survey by Merrill Lynch reported that 56 percent of those who plan
to work during retirement plan to move into a completely new career.
If this includes you, move carefully. As a new entrant to a new
field, you’re unlikely to earn as much as in your old job. That’s
fine, of course--as long as you aren’t planning on bringing home
the same paycheck as before.
Are
you sure you can make a new business fly? The Merrill Lynch study
found that 13 percent of those surveyed planned to start their own
business when they “retire.” Again, be careful here. Many new businesses
require a year or two before they generate positive cash flows (and
some never do at all), so be prepared to cover your income needs
during that time.
Do
you really think you’ll work forever? At some point you will stop
working, either because you want to or you have to. And at that
point you will need other income sources to fall back on. This means
it’s extremely important to stash away what you can now into tax-advantaged
retirement savings plans, such as 401(k)s and IRAs.
THE
BOTTOM LINE: Working during the retirement years is an appealing
option for many people but if that’s your intention, be realistic
about how much income a working retirement could bring in. Plan
for that lifestyle just as you would any other retirement goal and
recognize that may need to support your lifestyle with money you
save today using retirement accounts.
THE
ARMCHAIR MILLIONAIRE WEEKLY SURVEY: Is the U.S. economy headed for
a crash? Log on to www.armchairmillionaire.com and let us know.
Lewis
Schiff founded the Armchair Millionaire Web site in 1997. His first
book, The Armchair Millionaire, was published in 2001. Schiff's
newest report, "How to Know When You Are Rich," is now
available at www.armchairmillionaire.com.
CONTACT
INFORMATION:
Lewis Schiff
Armchair Millionaire
877-833-2823
http://www.armchairmillionaire.com
