Retirement Planning

Some days, you may feel as though you have been working forever. On other days, you may not be able to imagine a time when you aren't punching the clock. Whether your career is your calling or simply a means to an end, the day may eventually come when it is time to hang up your work clothes and join the ranks of the retired. If you aren't sure how to handle the idea of retirement--from the money to the down time--read on for ideas on making the transition with ease.

The Nest Egg

When you first start thinking of retirement, your thoughts are probably focused on, "Can I afford it?" Answering that question can determine not only how long you continue to work, but what kind of lifestyle you may have after you leave the workforce behind for good. To calculate how much will need to live comfortably in your golden years, you might want to start by taking a look at your gross income--the amount you bring home today. Now from that number, take away any money you are saving in a 401(k) or other retirement savings account, because you probably won't have a need to continue that practice once you actually retire. You can also subtract whatever amount you put towards FICA (Federal Insurance Contributions Act). The total amount left over is the amount you will probably need to continue to live in the manner to which you have become accustomed.

The earlier you start to save, the easier it may be to accumulate the amount you need. But it is never too late to start. Figuring out how much you will need for retirement can depend on a variety of factors. Consult with a trusted financial advisor to consider the seven items that go into finding that magic number: 1. Your desired annual income 2. Your hard and fast date for retirement 3. The average inflation rate 4. Your expectations for the average return from your investments 5. The current total worth of your investments 6. The estimated monthly amount of your company pension, if applicable 7. Your expected monthly Social Security benefit

Insure and Secure

While you probably fully expect to be healthy, wealthy and wise when retirement comes, planning for the unexpected is never a bad idea. Of course, if you have a home or car, you will want to continue to pay for insurance to cover those two areas, but what about life insurance? Do you still need to pay for that after you retire?

You probably purchased the life insurance policy to secure your children's comfort and future while they were under your care. Odds are that by the time you retire, your children will be on their own. And if you have planned well for your retirement, your spouse's needs were also included, thereby eliminating the need for you to continue with a life insurance policy. Everyone's situation is different, so your financial advisor can help you decide what is right for you.

On the other hand, there are areas of insurance you may need to take on when you retire. For instance, there is disability insurance. If you retire before the age of 62, you may want to consider purchasing your own disability policy to offset any potential income loss. Also, you may want additional health insurance coverage to pay for what Medicare doesn't cover. Finally, there is long-term care insurance. If you want to be covered, should you need to move to an assisted or long-term care facility, a policy here can help. But you'll want to keep in mind that, like the care you are insuring for, the policies aren't inexpensive. Try shopping around to get the best deal and, of course, the younger you are when you purchase a plan, the better deal you may get.

Time to Downsize

The kids are grown and gone, and it is just the two of you (or just you) rambling around that big house. While you may have spent many happy years in your home and have lots of memories there, retirement may be the time to think about moving into a smaller place. Not only can you reduce the time, money and upkeep, you may also be able to bulk up your nest egg with the proceeds from the sale of your home. That extra money could mean the difference between a retirement where you get by and one where you can travel or fulfill any other dreams you have been delaying.

What to Do?

While you probably think the most about money issues when it comes to your retirement, there is also the looming question of what to do with yourself. Having outside interests, activities and companions can make all the difference in an enjoyable and fulfilling retirement. If you have a spouse, you probably love each other and enjoy each other's company--just not 24 hours a day, seven days a week, 52 weeks a year. Pursuing your own interests can not only bring you individual satisfaction, it can help you better connect with your partner. Money can certainly provide for your comfort during retirement, but your interests and pursuits can make your golden years a pleasure. After all, you have worked hard your whole life; why not enjoy your retirement years?

SunTrust is unable to offer tax or legal advice. Please consult with your tax and legal advisors.