In Financial Planning, Investment Management, Personal Finance, Retirement Planning

As a CERTIFIED FINANCIAL PLANNER™ professional that specializes in helping Gen Xers and Millennials, “retirement seems so far away” is a common sentiment shared by the majority of the individuals I meet. When trying to balance a multitude of competing responsibilities that demand your immediate attention (paying down student loan debt, saving to purchase a home, starting a family, etc.,), it can be challenging to wrap your head around planning for an event that will occur decades in the future.

No one knows what the future holds, but in order to plan for retirement, you must make assumptions about the future using information you know now. Time is of the essence and you can leverage time to plan for your ideal life in retirement right now.

Before proceeding, let me briefly share a couple steps you can take to help ensure your ideal retirement:

  1. Live below your means now. Analyze your expense transaction history (the previous three months) and work to establish a realistic budget. Future Map Financial’s planning tool can assist you with reviewing your cash flow history by aggregating your financial accounts (i.e. checking acct, savings acct, credit card accts, student loan accts, etc.) and establishing and monitoring your budget. You may notice that you can eliminate some frivolous expenses.
  2. Increase your retirement savings. Once you have a budget, look to see if you can increase your retirement savings contribution using the extra cash flow you discovered. This is a quick and easy way to instantly increase your retirement savings.

Knowing When You Can Retire

Knowing when it is the right time for you to retire is a personal decision determined by your unique set of circumstances. While the average national retirement age is 65, that doesn’t necessarily mean that your personal retirement age will be that age exactly.

Many of you may aspire to retire earlier than 65 and many of you may want to (or have to) continue working beyond the traditional retirement age. Retirement is a deeply personal decision and one that encompasses much more than your age.

What do you want retirement to look like for you and your loved one? How do you want to live in retirement? Meaning, what do you want to do and fill your time with later in life? What quality of life and priorities do you want your retirement income to support? These are just a few questions that go into determining when you can retire comfortably.

Calculating when you can retire comfortably requires financial planning and preparation. And the time to plan for when you can retire in the way you want happens much earlier than you may think. Here’s how you can find out when you can retire.

2 Questions You Need to Answer to Find Out When You Can Retire

  • Can you afford to retire?

This is the first question you need to answer before you decide to announce your retirement. To find out, you would have to calculate all your annual spending needs, estimated healthcare costs, tax liabilities, and adjust for inflation as you progress through your retirement years. Remember, the value of your dollar will be different the day you retire and twenty years into retirement. This can be a tricky number to nail down, but here is an online calculator that can help. A good rule of thumb, you will need approximately 80% of your current income annually in retirement to live comfortably.

  • How much income will you have in retirement?

Next, add up all your retirement income. From Social Security benefits and pensions to your traditional retirement accounts like a 401(k), add them up and determine your monthly distributions. Know that by postponing collecting certain retirement assets can result in more money, so just be aware of that. Postponing Social Security or Roth IRA distributions can mean more savings.

Further Considerations Before You Decide to Retire

After you run your calculations, you can have a clear picture of what your retirement will cost and whether or not you have the funds to support it. That’s the basic version. The opportunity is to plan for the retirement you want instead of hoping you can retire. Therefore, start planning for your future now. That way, you won’t have to wonder when you can retire but, instead, work toward the retirement you envision for you and your loved ones.

Early preparation can make the transition into retirement not only a smooth one, but also a fulfilling one. When you know what you want your retirement years to look like, the things, experiences, and priorities you want your retirement income to support, and the quality of life you want to live, then you can adequately prepare a retirement plan that can make that a reality.



I will be back with all new articles of FRANKly SPEAKING on January 10, 2019! Be sure to enjoy this holiday season with your family and loved ones and check back in after the New Year! Thank you for being an active an active member of the Future Map Financial Community.

As always, I invite you to reach out to me – in real life – with any comments, feedback, or questions!  [email protected].  Are you ready to take the first step towards securing your financial future? If so, schedule your free 45-minute no-obligation consultation with me today! Schedule Your Consultation with Frank.


Disclaimer: The information contained in this article is for informational purposes.  None of the information provided in this article is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. Please consult with your accountant, finance professional, and/or legal counsel regarding your specific circumstance. Reproduction of this material is prohibited without written permission from Frank Shields, and all rights are reserved. Read the full Disclaimer.


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