Archives For Retirement

Are you using a adding machine to calculate your retirement?

Have you ever wondered how much money you’ll need when you’ll retire? Perhaps retirement (I hate that word) is far off or it could be coming at you like a freight train.

How much money will you need? I’ve collected and reviewed 10 different calculators. 5 Stars is the best. I suggest that you try several as you’ll notice differences.

TIPS

 

  • You’ll need at least 70% of your current income in retirement, if you want to have fun you’ll need more.
  • Determine what age you and your spouse will leave the work force.
  • Estimate you Social Security benefits if you can’t find your paperwork.
  • Conservative return rates are 5-8%, Agressive are 8-12%.
  • Standard inflation rate is 4%
  • Try multiple calculators and return every 3-5 years to see if you’re on track with your goals.

10 Retirement Calculators

AARP- Easy to use and gets the job done. Also factors in SS and estimates how much you’ll need each year. 5 Stars

Bloomberg- A bit too simple and doesn’t factor Social Security. I expected better Michael. 1 Star.

Charles Schwab- I really like this one Chuck! I especially like the interactive graph at the end. Very useful. 5 stars

CNN- Simple to use and it gives a projection if you’re on the right track. It does factor in Social Security. 4 Stars.

FINRA- Basic graphics, yet it gives you instructions and nice chart at the end. 4 Stars.

ING- Just a cute little tool to find out how much you’ll need to save. Only provides a piece of the puzzle. 2 stars.

John Hancock- Honestly this one seems a bit complex and I couldn’t get it working. I always imputed something wrong. There is no guide and I quit after 5 minutes. Next… 1 Star

Office of the Secretary of Defense (for Military Retirement)- Straight forward and much needed. 5 Stars

T. Rowe Price- Good tool and nice slide show at the end. 4 Stars.

Vanguard- One of the best calculators I used and only 1 page. Uses slide bars that change the outcome automatically. The only drawback is you have to figure your SS by yourself, but they provide a link. 5 stars.

4 Factors to Consider:

  1. Are you factoring in Social Security benefits? Will they be around when you retire? Better plan for the worst if you are young.
  2. What will the tax and inflation rate be? Again, youngsters (anyone under 40) should plan for higher taxes and inflation in the future.
  3. What state will you live in when you retire? Some states don’t have income taxes.
  4. Will you be out of debt? I hope so! Get on the ball and let’s get this done. Contact me if you need a financial coach.
Which calculator did you prefer? How are you planning for life after work? Comment below!
(Photo by  Thomas Hawk)
Senior Citizen Parachuting

What does a radical retirement look like? Photo Credit Woody H1

This is our third installment about work and retirement. Why did we combine the topics of work and retirement? Our beliefs about working inform our view of retirement.

In part 1 we began to unpack our baggage about work. In part 2, we looked at the deeper underlying beliefs and origins of work. We now turn our eyes towards connecting this thing we called work with the American view of retirement.

Our View of Work Informs our View of Retirement

I believe it is impossible to explore our view of retirement, without fist examining what we believe about work (including careers). Work is a good thing and has roots in the beginning of time.

Working grounds us in our humanity and aligns us with the divine.

If work is good intended as an original component of creation, why then does America flee work and look longingly toward retirement?

American View of Retirement

The recent American view of retirement is to work hard in a career, quit working on a magical day, and then begin engaging in what you really want to do. That could be spending time with family, gardening, volunteering, or playing golf all day.

In the American view of retirement a life of work turns into a life of play, until you you die.

How will this retirement be funded? Savings, 401k, IRAs, pensions, and Social Security of couse. Americans aren’t doing a good job at this goal either with 49% of us not saving for retirement. Add on top of this a failing Social Security system and longer life expectancies and Houston we’ve got a problem.

Where did this view of retirement come from? Should we blame Otto Van Bismark or Francis Townsend?

Along the way we have misunderstood the goal of working. The goal of work isn’t to strive towards a life of leisure where we don’t have to punch the clock.

While I support saving for future goals and for our later years in life– the goal of American Retirement isn’t one that I’m aiming at. I propose a much more radical view of retirement.

A Radical View of Retirement

Retirement is a word that I have come to disdain. It implies a retreat and abdication from life. I wrote about this in my article Retire Retirement.

Based on the canvas of our previous discussion on work, I propose a view of retirement based on the fact that work is good.

Yes, work for pay and a deeper meaning of work–a return to vocation or calling as described by Dan Miller:

“…it’s what you’re doing in life that makes a difference for you, that builds meaning for you, and that you can look back on in your later years to see the impact you’ve made on the world.”

Our jobs and career are an extension of our calling, they give feet to how we’re wired, and guide us to making a difference in the world. We’ll have many jobs and careers–but our vocation and life purpose remain constant.

Live a Radical Life and Retirement

With our vocation and calling guiding us, I propose erasing the invisible lines of retirement. Rid your mind of a date and time when you’ll be able to do what you love after you retire. What are you waiting for?

Since retirement now doesn’t exists, you have permission to live a radical life no matter your age. You no longer have to wait until age 65 to pursue happiness. Go ahead and do work that matters today.

Radical Ideas:

  • Make steps to quit your job (Read Quitter by Jon Acuff)  and transition to a life that aligns with your vocation.
  • Begin a business that allows you to do what you love that meets the needs of others. 8 Lessons I Learned from the $100 Startup  will guide you, like it has me on this journey.
  • Engineer a life that isn’t dependent on living in a certain location. The blog Location 180 gives proof that living anywhere is a viable reality.
  • Create a community that encourages others towards positive and healthy goals like Nerd Fitness.
  • Impact and empower the world by creating organization like Charity Water or Fount of Mercy.

Work Until You Die

It doesn’t matter what our age is, there is work to be done. Vocations and callings to be lived out. This world needs our hands and feet to till up change and spread hope that grows like fertilizer.

Some have said they don’t want to work until they die. If you have a improper view of work–then I agree that is a life to be avoided.

I will work till I die. Living a life of faith. Giving hope. Loving others. Living a radical life. 

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America gothic

Credit Will Merydith.

In Work and Retirement Part 1 we began a conversation about work and retirement inspired from a conversation from my fellow writer John at Married with Debt.

Why are we even examining the topic of work? Simple: The way we view work, informs our opinions about retirement. In order to truly explore the topic of retirement, we have to first understand our bias and beliefs surrounding work.

The Goal of Work is…

My friend John has 10 Rules to Eliminate Debt and they are very helpful, heck I even subscribe and teach several of these rules to my clients.

I cannot agree with his final rule which states, “The goal of work is retirement.” In the context of his rules John pushes people to think about why they are working and fight against consumerism. I can applaud the sentiment, but can’t support the statement.

I believe work is much much more.

In the Beginning was Work

This is where my view of work diverges and takes on a much deeper meaning. In the beginning when God and Adam were hanging out in the garden (pre Eve) work existed. Yes, in this perfect world Adam had a task–a job–work to do.

He was not idly kicking back eating grapes and petting unicorns. There was work to be done. Adam’s main task was to cultivate and maintain the garden (Gen 2:15). Yes, even in paradise before the snake slithered and fruit had bite marks, work existed.

Man also had a special assignment. His special task was to give names to the animals. Adam used his time to create order, joining God in the creative process.

True, work became more difficult once Adam and Eve disturbed the created order; yet in the beginning was work and work was good.

My View of Work

In light of the above example, work is much more than punching a time clock, longing towards a retirement party and period of time where work doesn’t exist.

Work is…

1. Natural- Work is part of the created order of life and thus work is good and not a curse.

2. To be Embraced. Work is not something to be avoided, but rather embraced. As we work–we are at the core embracing our humanity.

3. Holy- God himself created and performed work. As we work, we are reflecting the image of God in us.

We are most alive when we embrace the God given tasks before us and join God in creating order and beauty.

The Goal of Work is:

  • To perform the tasks God has given us. There is work before us to be done on a daily basis. I doubt you’re a farmer, but there are still preverbal gardens to maintain and cultivate.
  • To join God in the creative process of creating order and beauty.

I believe it is time to have a proper view of work. In the beginning was work and work was good. In A Radical View of Retirement: Work and Retirement (Part 3) we will discover how a proper view of work informs our view of retirement.

What is your view of work? 

Steel Toe Boots

These boots were made for working–were you?
Credit  Code52.

Work is something we do each day, but what are the underlying beliefs about work and how does that inform our actions and view of life?

My friend John at Married with Debt (he’s debt free now) have been discussing work and retirement lately. You can read a recent article John wrote about work to get an idea.

John and I agree on many major issues, but we may have slight differing opinions about work and thus retirement. One thing I do know:

“The way we view work informs our opinions about retirement.”-Brent

Let’s go to Work

This thing we call “work” is used to describe many ideas. Work is both a noun, adjective and verb in which Dictionary.com ascribes 32 definitions. Mostly these definitions involve the idea of toiling, exerting force, or employment.

A few phrases that involve work:

  • I love working in the garden.
  • I get off work at 5:00.
  • I’m been out of work for a year.
  • Do work son.
  • Work your passions.

“Work” pushes thoughts towards your own occupation or undesirable tasks you’ve done in the past. When the word “work” is mentioned it might carry a lot of baggage. When you hear the word “work” what do your thoughts drift towards?

My Experience with Work

I grew up learning how to exert force, to accomplish tasks, and to gain money and respect from doing so. My parents taught me well to work hard, though I didn’t appreciate it at the time.

The dreaded legal pad sat on the counter many an afternoon when I came home from school (one area where I didn’t work hard at till college).

The legal pad held the future of my afternoon: Chores. I grew up on the edge of the city in a pocket rural street in Alabama on a few acres of land, not the mention the acres we reclaimed from the forrest behind us. My chores could be to chop wood, move wood, burn wood, stack bricks, mow, fight back the forrest from encroaching on our land, kill fire ants, rake leaves, and the list goes on.

Needless to say these tasks involved exerting a considerable amount of energy, but it grew my character and confidence as a young lad.

Working for Pay

In turn I began working for money and I had a lot of jobs by the time I graduated college. [My First Jobs]

I began my short career as a teacher, but found it wasn’t a task I wasn’t giving nor desired to give my all to. I did enjoy coaching the cross country team and was sad to give that up.

I began realizing that the work I did needed to align more with my passions and beliefs. This lead to stint teaching English overseas and then pursing a masters degree. Eventually in 2008 I needed a “real job” again worked a job for several years which I thrived at, but found my soul dying.

In 2010 I began writing and coaching others and found my heart beating once again. 2011 found me giving my two week notice and embracing the entrepreneur life.

My journey of working for pay has evolved and I’m sure will continue to meld closer to the center of my beliefs and passions with time.

I don’t believe work is bad. I don’t believe work is the central focus of life. I don’t believe work defines me.

This conversation about work and retirement continues In the Beginning: Work and Retirement (Part 2)

What has been your experience with work? Do you have any baggage that informs your opinons about work? 

SSC

Photo Credit SurvivalWoman

A new government website makes it easy to access your Social Security statements online. In fact, this is now the only way (unless you’re over 60) to access your Social Security statements since they stopped sending them in May.

Yeah, I didn’t know either until I started to research this article. It’s going to save maybe $70 million per year by going to an online system. There are questions about the legality of this move and how this will hurt those in rural areas and minorities without interent access.

If you are over 60, you can opt to still receive statements by mail, but you’ll have to change your delivery options after you sign up online.

This is the new system, so let’s adapt and learn how to access our SS statements online. Sign up online is easy and takes less than 10 minutes to complete.

You’ll need to have on hand: email address, Social Security number, U.S. mailing address, and be over 18.

Why Should I Check my Social Security Statement Online?

I’m glad you asked. The online social security information can be helpful in many ways.

First, the Social Security Administration has stopped mailing the statements, so this is the only way to access this important information.

Second ,it gives an idea of *estimated disability and retirement payments that can be used for retirement planning.

Third, it gives your lifetime reported social security earnings which should be double checked for accuracy.

This is a big deal according to a study by the Social Security Advisory Board:

“More than half of those who read the statement reported that as a result, they increased their savings rate or revised their financial plans for the future; 25 percent said they contacted a personal financial adviser.”-SSAB

Security & Process

They take security seriously and use Experian to verify your identity (read the privacy statement).

  • There is also a feature that will text your phone every time your online SSA account is accessed. The verification process is via: W-2, 1040 SE, last 8 digits of a credit/debit card, or the last direct deposit of Social Security benefits. [In my trial I was unable to authenticate my identity using a debit card, so maybe only credit cards work?]
  • You’ll go through a series of financial history and address questions to confirm your identity similar to getting your free credit report
  • Establish 3 standard security questions and answers.
  • Set a password that expires in 180 days for your Social Security login.

Dashboard

After you finally verify your identity and go through security you’ll able to access your Social Security statements online.

You’ll be able to:

  • Print and/or download your most current statement.
  • View your *estimated Social Security benefits for retirement and disability.
  • View a reported earnings record of your lifetime working history.
*The numbers given are estimated benefits and are current to change through new laws, future earnings, cost of living increases, etc. You won’t know your actual benefits until you qualify and apply.

Conclusion

I found it very beneficial to view my Social Security statement and it was one of the better government websites I’ve visited.

It gave me a reassurance that if I do die, my family will have an additional survivorship monthly payment along with my life insurance policy. It was also interesting to be able to view my life time earnings history in one place going back to high school. Wow! I’ve earned a lot of money over my lifetime.

I encourage you to access your Social Security statements online today. I think you’ll find it helpful and convenient, especially as you near retirement age.