What if I retire today?

Halfway through a long rocky hike in the Great Smoky Mountains, I realized I was over my head. Unprepared and overwhelmed, I felt finished. Whether it went forwards or backwards, I had 7 miles to go. Just as I was questioning my life choices, my son suggested calling the park ranger station or even the emergency health services.

“Oh. How would that be?” I thought. “Was I really that bad? “ As tempting as a tap-out might sound, I was able to get by with an extra Gatorade and energy bar instead of a rescue helicopter and IV attachment. Six hours later, with battered legs, bruised ego, I finished the hike in the dark.

We all face moments of insecurity and indecision. Sometimes we reset and sometimes we withdraw. It’s the same on the road to retirement – some of us feel stuck and others struggle. If you’re rethinking your next planning move, don’t panic! Instead, meditate: If I retired today, what would it be like?

If I retired today, what would my cost of living be?

This part of the image is not ideal. When you consider the astonishing rapidity with which the rate of inflation has moved from a long and comfortable period of lows to today’s all-time highs, it may seem wise to pause and assess current economic conditions. In just one year, the inflation rate marked its largest increase in 40 years in June with consumer prices rising 9.1%. This was the largest increase in 12 months since the year ending November 1981, when the consumer price index hit 9.6%.

Whichever direction inflation goes from here, it is impacting all of us and somehow inflation could affect retirees more than others. What are we seeing? Higher energy prices, including a recent record for gas, and cost increases for a wide range of other items, such as groceries, travel and accommodation. What does this mean for retirement? An inflation rate of just 4% will double the cost of everyday items over the course of an average 18-year retirement. With an inflation rate of 8%, daily costs could double in nine years.

If you decide to move forward with retirement, the outlook isn’t all bad. This year, the Social Security Administration increased benefits by 5.9%, the largest increase in the cost of living in 40 years. Although the peak for retirees has been less than the current inflation gap, there could be a 9.6% increase for social security beneficiaries in 2023 to offset skyrocketing inflation, according to a recent projection by The Senior Citizens League. one of the nation’s largest non-partisan high-level defense groups.

If I retired today, what would my nest egg be like?

If you take a look at your 401 (k) balance in this volatile market environment, the picture can change frequently. However, if you look, try not to touch because your wallet can be like a bar of soap – the more you manage it, the smaller it might get. But there are digital planning tools and online calculators available to help you stay on track and move forward. For example, you might consider the wide range of helpful retirement planning resources available online on these sites:

Retiring today could be compared to starting a hike at the foot of a hill. You may face a steep climb before you can set a more comfortable pace. When making withdrawals from your portfolio, the order of your investment returns may affect the overall value. This risk-return sequence is something you should discuss with your financial professional, because timing is important.

Looking ahead, converting some of your assets into a stream of income, such as an annuity with a lifetime earnings or a dividend-paying stock, for example, could help you fuel your retirement without the worry of running out of steam. And when you retire, will you be emotionally ready to spend your savings? Maybe not. According to the Employee Benefits Research Institute, three-quarters of average retirees, defined in terms of income and assets, have seen their egg nests stay the same or increase their retirement. How come? I believe psychologist Abraham Maslow can attribute it to being stuck at the base of his pyramid.

Maslow theorized that the most basic human needs are physiological – air, water, food, clothing and shelter – and safety, including personal and financial security, health and well-being. Significant retirement should evolve beyond these needs at the bottom of Maslow’s hierarchy of needs. Unfortunately, the fear of running out of money in retirement continues to haunt a generation of boomers.

If you spend your retirement days worrying about your savings, rather than spending them comfortably to realize yourself, you are not on the right track.

If I retired today, what would my new life be like?

Money aside, another vital asset in retirement is time. After retirement, your new passing of time comes in daily doses where you get another eight or more hours free. How could it be? Sleeping, playing golf, playing pickleball, traveling or starting a project. You may have an exciting start, but for many, after the retired sugar rush wears off, managing the extra time can be an unexpected challenge.

If you have a purposeful plan with a purpose, your watch can be filled with rewards rather than regrets. Those who have no purpose in retirement are significantly more likely to suffer a heart attack, stroke, Alzheimer’s disease, early mortality, and other health risks associated with aging. It is obvious that a financial plan is not a retirement plan. There is a bigger picture at play.

And connections are key. Vivek Murthy, former US surgeon general to President Barack Obama, notes that “loneliness and weak social connections are associated with a reduction in lifespan similar to that caused by smoking 15 cigarettes a day and even greater than the associated one. to obesity “.

The pandemic ushered in a new era of Carpe Diem retirement decisions. But due to inflation, the economy, or a general sense of unpreparedness, some are overriding that decision, not retreating when possible. Or maybe he just misses making strong connections with colleagues.

Whether you push forward or backward, reset or retire, take a moment to talk about your retirement plan with your financial professional. This is a decision you can’t go wrong with.

Jackson® is the trading name of Jackson Financial, Inc., Jackson National Life Insurance Company® (Internal Office: Lansing, Michigan) and Jackson National Life Insurance Company of New York® (Internal Office: Purchase, New York).
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Jackson National Life

Phil Wright is Vice President of Marketing Communications at Jackson National Life Distributors LLC (JNLD) and an award-winning financial writer. He started with the company in 1994 and focuses on the development and creation of business marketing content. He is a Registered Principal and Certified Fund Specialist (CFS®).

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