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Retirement Reality Check :: Retirement Income :: THE RETIREMENT SOURCE®
Retirement Reality Check

Retirement Reality Check

Too many people today have unrealistic ideas about retirement. Some people think it is a slam dunk requiring no more attention than buying a new car and for others it seems like the impossible dream. Since the probability of having to retire at some point is extremely high, it makes sense to get an idea of how that might work out. We suggest doing a reality check at any stage of life to determine what adjustments might be required to meet your rock bottom lifestyle needs.

Obviously those people facing a job loss or other serious financial setback are forced to do this on short notice. It is far better to do this kind of evaluation when you are not under the stress of necessity. Hope is a wonderful and comforting thing, but it is neither a sound financial plan nor a wise investment strategy. In the current uncertain economy we can hope that the combined efforts of global government officials solve the financial crisis soon and well. But what if they don't? What will that mean for you and yours?

Our best advice is to live for the best but prepare for the worst. A good example of this approach is that of homeowners insurance. We certainly don't want our home to burn down and we don't expect it to, but having it insured gives us peace of mind. Obviously we cannot insure everything in our lives even if we could afford to. We can, however, develop strategies to help us make the best of adverse circumstances.

One approach we have found very helpful for many clients is that of fallback positions. Take for example a plan to retire at age 62. If your financial resources are not sufficient when you reach that age, your fallback plan may be to continue work to age 65. If your resources are still not sufficient at that time your fallback plan may be to continue working longer, take a part time job or reduce your living standard to an affordable level. The same type of flexible strategic planning can be applied to other life situations such as having a child enter college right after high school or perhaps working a year or two to help with the finances.

The whole point of the reality check is to review what you would like to have happen against the realistic probability of that occurring. If your first choice comes true – wonderful. If not, you have a series of fallback plans that will enable you to stay in control of your life.

We developed the Retirement Reality Checklist many years ago to help people become aware of most of the issues that should be considered when planning retirement. We combine that with a simplified retirement financial evaluation done by one of our professional advisors in our Free Retirement Screening.


NOTE: The above Retirement Reality Checklist file is in PDF format.
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