Strategies for Retirement Planning: Maximizing Assets and Financial Security

We also own 45 acres of farmland that we planned to retire on. At this point we are both considering selling this land and using the money for a nest egg. This could bring in around $500,000.

We both work for the school district. I have 25 years of experience and plan to retire in five years, at which time I will be eligible for full retirement benefits. I will then be 65 years old. My wife started much later and she’s not a teacher, so she won’t have the years as me or the financial means because she doesn’t earn as much. She is also older. I know she can’t keep working forever. She is already 67 years old.

We also had IRAs before entering the school system, as neither of us had jobs that paid in retirement. Our children are grown up. They both went to college, earned master’s degrees, and have their own careers and homes. Since they started earning, my wife told me she puts away about $7,000-$8,000 a year into these IRAs.

We always attend retirement seminars put on by the school district, just trying to understand what is out there and what can help us. I plan to write when I retire, but I would also like to work a little. I could substitute teach a few days a week or work as a yoga or aerobics instructor.

Do we feel like we’re on the right track, or can you recommend something we should spend our time on to start with over the next five years?

Hope in Texas

See: We are in our 60s, have almost $3 million, and want to buy a new house. Should we dip into our savings or take out a mortgage?

Dear hope,

There are many other things a financial advisor would need to know to determine if you are on the right track, including your current income, your overall saving and spending rates, your planned expenses, and your financial needs over time. retirement.

But you mention some pretty important assets, and it can absolutely help you later in life. For example, you mentioned that you are considering selling your farmland and that, of course, this sale would benefit your overall financial security. You also have that second home that you bought while your son was in college, and if you don’t intend to give it to him, you have a few options, including selling it or renting it.

Of course, the rental option requires some work. You, or someone you trust – and pay – will have to manage this property, and you will also have to find trustworthy tenants to live there. You also have to take care of home maintenance – so there are two roofs to worry about, not just the one you live under – and all the other costs that come with owning a home. However, this remains an option, and some retired people prefer to rent a property to diversify their assets.

On the other hand, if you sell that house, you will have more money in your savings and investment accounts.

Outside of real estate, it’s just a matter of crunching numbers. Take seriously what you plan to spend in retirement and how much you think you’ll need throughout your life. This is a very big number to estimate – and it’s impossible to put it down to the nearest cent, dollar, or even hundreds of dollars – but having a clear view of your expectations and realities will make the transition to retirement all the more comfortable. . And you won’t worry as much about attending all those retirement seminars!

Here are some things you need to think about. For housing: Will you stay in your home, how much will it cost, and how much money have you set aside to pay for repairs or improvements if you plan to grow old there? If you don’t plan to live there, where will you live and would you consider or need to go elsewhere, such as an assisted living facility? If you finally decided to build this house on the farm, how much would it cost and where would the money come from? Are you ready to dip into your retirement savings to buy a home, and what are the costs and benefits? And what are the tax and home insurance implications?

Try to get a good estimate of what your Social Security and pensions will bring in and what you can expect from the balance of those IRAs, including with your wife’s additional investments each year – and by the way, say tell him that she is doing an excellent job. .

Also see: I’ll be 60, have $95,000 in cash and no debt – I think I can retire, but financial seminars ‘say otherwise’

Healthcare can be a huge expense. How much insurance coverage do you have and do you need more? How much should you both expect to spend on healthcare? Think about your own and your family’s medical history.

What other goals do you have for this time in your life, such as traveling or helping children? What are your weekly expenses and how much would you need for leisure or leisure? A side hustle would be great, not only for extra income, but also to stay active.

Lire: Volunteering can be the key to a happy retirement. Why aren’t more people doing it?

Write down all these numbers and try to map them. This is not a one-off conversation, but several conversations, and there will likely be a lot of back and forth. Basically, you don’t want to leave anything as a mystery.

It’s necessary to have a financial plan, especially one that will be flexible as your life evolves. If you don’t have it yet, I suggest you start immediately and be prepared to adjust it over the next five years or more.

Readers: Do you have any suggestions for this reader? Add them in the comments below.

Do you have a question about your own retirement savings? Send us an email at HelpMeRetire@Crumpe.com