“Most people don’t want to deal with retirement—it’s boring and accountant-y,” says Sydney Lagier, 49, who blogs about retirement at Retiredsyd.typepad.com. “Plus, it seems far away and not real enough to get motivated to save.”
But denial won’t put bucks in the bank. Lagier, who retired five years ago from her job at a San Francisco Bay-area venture capital company, offers these tips for creating your own exit plan.
Define retirement. It’s not all golf or tennis or travel—many retirees nowadays continue to work. “Think about what you want on the other side,” says Lagier.
Calculate costs. Figure out what you spend now, then estimate what expenses will change—like health insurance, commuting and wardrobe. Subtracting Social Security income from projected costs will give you your shortfall, which you’ll have to make up for with savings, earnings or cutting “budget fluff.” “Our fluff was travel,” Lagier says. “Now we do house exchanges and use airline miles.”
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Save smart. Take advantage of your work’s 401(k) retirement plan, says Lagier, and explore savings options if you are self- employed, such as a simplified employee pension plan (SEP).
See a financial advisor. Schedule a first visit about 10 years before you plan to retire and again close to retirement. “A planner can tell you what you have to do to make your plan work,” Lagier says. “I did it, and I’m a CPA.”
Take it slow. When the big day comes, don’t jump into a dozen commitments. Take time to discover the new, retired you.