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Plan Well, Retire Well

Saving and investing your money

Friday, March 6, 2009

Are You Ready to Retire? Take this Quiz.

Posted by Karen Chan - Karen Chan Retirement Planning

Yesterday, I met with a group of colleagues for a session about retirement planning. A number of them could retire at any time. But should they? Starting to take distributions from your investments when values have dropped so much is a worst-case scenario. But what other factors should they consider? Perhaps you would enjoy taking the very unscientific, magazine-style self-test that I gave them:

  1. I have projected what my expense will be in retirement.
    1. Yes
    2. No
  2. If you retire now, where will the money come from for expenses not covered by a pension or Social Security?
    1. sell investments
    2. use money in savings accounts, money market accounts, savings bonds, etc.
    3. use my credit card or borrow from other sources
  3. I expect to have some large expenses early in my retirement, such as home remodeling or extensive travel.
    1. Yes
    2. No
  4. I have already moved all my money to cash.
    1. Yes, after I'd already lost quite a bit.
    2. Yes, before the bear market started.
    3. I only moved some of it, but I'm thinking about moving more of it to cash.
    4. No.
  5. For government workers: I have done a calculation of my Social Security benefits including reductions for my government pension.
    1. Yes
    2. No
  6. I currently track my expenses and/or follow a budget.
    1. Yes
    2. No
  7. Right now, I spend less than my income.
    1. Yes
    2. No
  8. I have a plan for how to manage my investments in retirement.
    1. Yes
    2. No
  9. I know how my money is invested, and why it's invested that way.
    1. Yes
    2. No

What's the moral of the story? You can't control or predict how the stock market will perform, but you can control your spending decisions and have a plan.

How many points do you think each of these answers should get? Click on my name below and let me know. You can also go to www.RetireWell.uiuc.edu to learn more about how to save, invest, and prepare for retirement.



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