用雙腳走遍世界 用真心感覺周圍

Make no mistake: Retiring is hard work. You have to figure out where you will live, whether your nest egg is big enough and what you will do with all that free time.

About to call it quits? Before you hand in your notice, ponder these five questions.

1. Do you have enough saved?

Add up your sources of income. You will have social security. Maybe you will have a pension.

On top of that, there's the income from your savings. You might start retirement with a 4.5% annual portfolio withdrawal rate, meaning you would pull out $18,000 if you have $400,000 saved.

In subsequent years, you would step up your annual withdrawals with the inflation rate. If annual inflation runs at 3%, you would pull out $18,540 in year two, $19,096 in year three and so on. These sums would include any dividends and interest you receive. Keep in mind that part of this money would go toward taxes.

There's a good chance you won't have as much retirement income as you would like. To give yourself some financial breathing room, you might trade down to a smaller home, move to a less-expensive part of the country, take cheaper vacations and eat out less. If that doesn't make the numbers work, maybe you need to stick with your job a little longer or work part time in retirement.

With a little belt-tightening, your projected retirement income may cover your monthly costs. But that isn't enough. You also need to budget for major expenses, such as replacing the car, the furnace and the roof.

And then there's the really scary cost, long-term care. A majority of seniors will, at some point during their retirement, need help with activities like bathing and dressing. For most folks, the costs involved will be fairly small.

An unlucky minority, however, will get hit with truly horrendous costs. A study in the winter 2005-2006 issue of Inquiry, authored by academics Peter Kemper and Harriet Komisar and consultant Lisa Alecxih, estimated that 16% of today's 65-year-olds will incur expenses of over $100,000. This sum represents the amount you would need at age 65 to cover projected long-term-care costs.

How will you cope if you are walloped with expenses like these? You need to head into retirement with some sort of plan.

Maybe you are willing to deplete your assets and then fall back on Medicaid. Maybe you can cover the costs with pension income, Social Security and portfolio withdrawals. Maybe you will tap these income sources -- and supplement them with a long-term-care insurance policy.

3. How will you generate income?

A fat nest egg, a balanced portfolio of stocks and bonds and a modest withdrawal rate, like 4.5%, are good starting points. But you also need a system for extracting cash from your investments. Your goal: To generate an income stream that lasts as long as you do, that rises with inflation and that doesn't get derailed by bad markets.

To that end, you might take your dividends and interest in cash, and then garner extra income each year by selling either stocks or bonds, depending on which has lately performed better. Alternatively, for extra safety, you might draw your spending money from a cash reserve equal to three or even five years of portfolio withdrawals. To replenish the reserve, you would occasionally sell stocks and bonds.

Meanwhile, for further protection against bad markets, you have Social Security and any pension income. These will provide a base level of income, while also offering a safety net in case you outlive your savings.

If you want additional protection, you might delay Social Security to get a larger benefit. You could also use a slice of your savings to purchase an immediate annuity that pays lifetime income.

4. Is your mortgage paid off?

Call me old-fashioned, but I have always thought that paying off the mortgage was a key step on the road to retirement. Yet more and more seniors are quitting the work force with their mortgage still outstanding.

In theory, if you have enough pension, Social Security and investment income to service your mortgage, there's nothing wrong with carrying that debt into retirement. In practice, making those mortgage payments will likely crimp your retirement lifestyle -- and leave you in a nasty tax trap.

What trap? To pay the mortgage company, you will probably have to make larger retirement-account withdrawals, which will be taxable. This extra income could, in turn, trigger taxes on your Social Security benefit.

To be sure, this double tax whammy will be partly offset by the mortgage-interest tax deduction. But if you are near the end of your mortgage, your monthly payment may include relatively little mortgage interest, so the tax benefit will be modest.

In fact, your itemized deductions may be barely above your standard deduction. That standard deduction, of course, is available to all taxpayers -- including your mortgage-free neighbors.

5 What will you do?

As you approach retirement, it's enticing to think about waking up a little more slowly and breezing through the rest of the day at a similar pace. But in truth, if your notion of retirement is confined to vague thoughts of relaxing, playing golf and traveling, it is likely to be a disaster.

The reason: Upon retirement, you lose not only the daily structure that a job offers, but also the social, physical and intellectual stimulation that comes with heading to work five days a week. If you don't replace that, both your physical and mental health may rapidly deteriorate.

What to do? You need an exercise schedule. You should make a point of seeing friends regularly. Most important, you need to find a new purpose.

That might mean taking college courses, volunteering or working part time in a job that's always intrigued you. The litmus test: When people ask what you do, your answer shouldn't be, "I'm retired."

by Jonathan Clements

from: Yahoo! Finance