Once you retire, how will you replace your working income to maintain your standard of living? In his new book, Retirement Reboot, Mark Miller offers simple, practical guidance to help ensure that you are prepared for retirement. Miller’s book is an excellent primer on the big questions and uncertainties retirees face. And, it offers smart guidance. Here’s an overview of many of the topics Miller covers:
- Retirement planning: Make a plan as to how you will have what you need to live on in retirement. Calculate what you spend each year now, how much is non-discretionary and how much is discretionary. Remember that you will likely have swings in your expenses, depending upon your health care needs. As a rule of thumb, people need about 70-80 percent of their pre-retirement income to maintain their standard of living in retirement.
- When to retire: It’s a different calculation for everyone, depending upon a number of factors.
- When to claim Social Security benefits: The longer you can wait before turning 70, the more you will receive. The question is how long you should wait?
- What to do about Medicare and health care costs. Fidelity estimates that a 65-year old will need $285,000 to cover health care expenses that Medicare does not pay for. Another expert agency estimated that a 65-year old couple will need nearly $400,000 for medical expenses. Miller explains why, if you can afford it, traditional Medicare is the “gold standard.” He advises to be leery of insurance agents who make their living off commissions.
- Growing your savings. Miller offers many tips for investing wisely, including avoiding paying fees, which can seem minor but can amount to a lot of money.
- Your home as a source of cash. You might want to consider downsizing. If not and you need money, you could borrow against your home.
- New work options. Think outside the box about the jobs you could take on. It’s not easy to do, but it’s important to keep in mind that your skill set could fit with jobs other than the job you had pre-retirement. You could even become a successful entrepreneur.
- Where to live as you age. Miller advises that you consider the amount and kind of space you will need. For example, should it be single level. How big should it be? How close is it to friends and family, the hospital and medical care?
- Plan for long-term care needs. There’s a high likelihood that you will need help with bathing, toileting, dressing, transferring and the like as you get older. Depending upon how much help you need, care can be very expensive. How will you get this assistance?
- Take advantage of financial advice. You should have a formal financial plan for retirement. You want an advisor who has a fiduciary duty to you, putting your needs ahead of his or her income. Miller recommends you get a Registered Investment Advisor, who charges a fee for his or her services. He suggests the qualities you should look for in a good advisor.
- Ways to reduce your taxes. Miller explains how to time your contributions to different types of accounts and how to coordinate income from retirement savings and Social Security. He also warns about the cost implications for you of large payments, for example, from the sale of a home.
- Find purpose in your life. Look back and ask yourself which activities have brought you the most joy and which the most misery. Focus on what brings you pleasure. Purposeful living has positive physical and mental health benefits.
There’s a whole lot more practical guidance in Retirement Reboot. It’s chock full of helpful advice that even I have not spent much if any time thinking about. If you have a few hours a week to work your way through the book, you will likely get a nice return on your $19.95 investment. Pub. date January 10, 2023.
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