Page 12 - EQ Mag-issue 5

RETIREMENT RESOURCE

Your Time: Planning for Successful

Retirement (Part 2)

In Part I, we focused on the “Million Dollar Question:” how much Our retirement planning strategy includes 12-Steps as a guide
money is needed in order to successfully retire. As you may recall, during your retirement planning journey, which does not focus on
the average person of average means will need in excess of one investments. We cannot stress enough that Planning backwards
million dollars during their retirement years in order to live is the strategy. Choose your intended retirement date and
comfortably. It is important to note, in retirement you will have the retirement income goals, think about your current situation and
same expenses that you have during your working years. You will implement the changes that you need to make today in
a l s o h a v e furtherance of those goals. As long as you prioritize successful
u n f o r e s e e a b l e retirement in every decision that you make, the pieces will fall into
( u n p l a n n e d ) place and your goals will be fulfilled. Let's get started.
expenses, and Social
Security and pension 1. Estimate Your Likely Income in Retirement
benefits are generally
subject to Federal and Your retirement income may come from several sources,
State income tax. including Social Security (discussed below), your employer
Keep in mind that we sponsored retirement plan, an individual retirement account, a
are living longer than savings account and potentially from a part-time job or business
o u r p a r e n t s a n d that you start in retirement. Several individuals also include real
grandparents, with estate holdings in their retirement income. For example, you may
many individuals find it desirable to sell your family home at retirement and
outliving their savings. downsize into a smaller low maintenance dwelling. The value of
If you currently spend that equity may be used as retirement income. Additionally, the
100% of your earnings purchase of rental real estate property prior to retirement may also
in order to pay for your supplement your retirement income by using the net rental income
Bonita L. Hatchett-Bodle, Esq.
expenses, some of in order to pay you own personal expenses in retirement.
which are discretionary, you will need 100% of your pre-retirement
income during retirement if you intend to maintain your same “Social Security” retirement benefits will be the exclusive form of
lifestyle. We are creatures of habit and it's extremely difficult to retirement income for many individuals. When you work and pay
change the lifestyle to which we have become accustomed. If Social Security taxes, you earn “credits” toward Social Security
change is necessary as part of your retirement planning journey, benefits. The number of credits you need to get retirement
then change must occur. benefits depends on when you were born. If you were born in 1929
or later, you need 40 credits (10 years of work). If you stop working
Next Steps to Your Journey on Retirement Preparedness? before you have enough credits to qualify for benefits, the credits
will remain on your Social Security record. If you return to work
This article focuses on the Million Dollar Question as applied to later, you can add more credits to qualify.
your personal situation and not principles of generally
applicability. It's important for you to analyze your finances, The amount of your Social Security retirement benefits is based
including your income, savings and debt, in order to determine on how much money you have earned during your working career,
how much money you will need to retire comfortably at your for which Social Security taxes were paid. Higher lifetime
targeted retirement date. We recommend that you keep a earnings result in higher benefits. If there were some years you
retirement journal, in written or electronic form, in order to track didn't work or had low earnings, your benefit amount may be lower
your process in reaching your retirement preparedness goals. than if you had worked steadily. The age at which you decide to

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