The freedom of retirement isn’t free. In fact, it’s expensive. Experts generally agree that you’ll need about 70% or even more of your pre-retirement income to maintain your current standard of living when you stop working.
That is, if you’re making $100,000 a year now, you’ll need about $70,000 a year when you retire. You can expect to spend about 18 years in retirement.
Video: Suze Orman Retirement Advice
Use a free calculator to get specific
Your money needs will vary with factors such as family obligations, future lifestyle and where you plan to live. Determining what’s required is easy: A variety of retirement calculators are available for free on the Internet. Here are just a few sites to visit:
Learn about your employer's pension or profit-sharing plan.
If your place of work offers a 401(k) plan, sign up and contribute all you can to it. If your employer doesn’t offer a retirement plan, suggest that he or she start one.
Put money in an Individual Retirement Account (IRA) to gain tax advantages.
Don’t dip into your retirement savings for anything but retirement.
Make retirement savings a high priority. Devise a plan and stick to it.
Give your boss plenty of notice
When the day to announce your retirement approaches, discuss your plans with your supervisor in advance. Give plenty of notice, erring on the side of too much rather than too little. Six weeks should be the minimum. If you are in a supervisory or managerial position yourself, give more than six weeks' notice.
Have fun after retirement
This shouldn’t be a time for boredom or the blues. Plan ahead to take part in activities so that you can feel you’re still in the swing of things.
Enjoy the arts. Search for concerts and plays in your area. Go to gallery openings and crafts fairs.
Stay fit. Take up fitness-oriented activities -- biking, golf and tennis are great ways to stay in shape while meeting others. Consider joining a local gym.
Find hobbies like scrapbooking, bird watching, gardening.
Keep learning. Enroll in a class at a local college or community center.
Volunteer. Many charitable organizations are looking for help.
Go back to work. On second thought . . . nah.
Plan a retirement party
Whether it’s you or someone else who’s making the move into retirement, plan to go out with a bang. This is a time for celebration.
Arrange for the get-together at your house, at a friend’s house or at a favorite restaurant. Build a theme around the retiree’s past occupation, what he or she plans to do now (golf, fishing) or the retiree's favorite vacation spot.
Put together a sign-in poster or book as a keepsake. Decorate it with photos of the retiree (let guests bring their own) and provide pens for signatures.
Hire a professional photographer or find an amateur to record the event. Be sure to collect current street or email addresses so you can send the photos to the guests later.
As party favors, distribute small address books to the guests with the retiree's current or future address already included.
