I tell members they might be able to, but it depends on how much money they want to live on. Some people prefer to work longer so they can have a higher income; others are willing to live on less if they can retire earlier. That’s why financial planning is such an individual process.
Setting goals is the first most important step. I worked with one member who needed to retire for health reasons but didn’t think he could until all his debts were paid off. I helped him design an income plan in which he had a higher income until his debts were paid off and then lowered it for future years. Another member wanted to retire early and thought he would use his 401k to pay off his house so he could live less expensively. I showed him that he would pay so much in early withdrawal penalties and taxes it would use up his whole account. Instead, we set up a monthly automatic withdrawal to pay his house payment and invested the rest of the funds for future growth. Many members want a higher income stream early in retirement while they still have to pay for health insurance or want to do a lot of traveling.
So do you have enough to retire tomorrow? It depends on what your goals are. Get the clearest idea you can about what is most important. If you are not ready, you’ll have to decide whether you want to retire later, live on less, save more, or some combination of the above.
Join us for a complimentary workshop on avoiding the “10 Most Common Retirement Mistakes” on Wednesday, February 29th at 5:30 p.m. This workshop will be held at the Main Branch. Please click here for details and to RSVP.
Betsy Dart is a CERTIFIED FINANCIAL PLANNERTM for the MEMBERS Financial Services programs located in Great Basin Federal Credit Union. For more information on Betsy and her services, please click here.