You’re probably getting pretty sick of news stories about all the Baby Boomers who are getting ready to retire and how they’re woefully unprepared financially.
Especially if you’re one of those Boomers they’ve been fussing about.
After all, you probably have some idea of what you want your retirement to look like, and how close you are to attaining your goals. You have a 401(k) – or two, if you can find the account information from that job you left 10 years ago – and some savings stashed away. And you’re pretty sure you’ll be able to quit working by the time you blow out the candles on your 66th birthday cake.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
That’s enough, right?
Sorry, friend. But the fretting media is correct when it points out that a pile of paperwork is not a plan.
The good news is it’s never too late to get your act together and do some proper prepping. And you can begin today by actually writing down your goals and figuring out how you’re most likely to reach them.
Here are some steps to get you started:
1. Develop a realistic retirement budget.
Put pen to paper and list the expenses you have now and expect to continue, as well as the costs that might come up when you’re no longer working every day. Really get down to the nuts and bolts: For example, your wardrobe expenses might go down, but your travel and hobby costs will probably go up. Will you have your mortgage paid off? What about your car? And remember to keep inflation in mind.
2. Make a list of your predictable income sources and how much they’ll bring in each month or year.
You can check on your Social Security benefits at www.ssa.gov; click on “my Social Security” and you can create your own account to see an estimate of what you would receive at different retirement ages.
Hopefully, you’ve been staying on top of any pension checks you’ll have coming in retirement. You should be receiving statements in the mail or online. If not, it’s time to contact the human resources departments at your current and former employers for that information. If you need assistance, the Administration on Aging Pension Counseling and Information Program might be able to help.
3. Get a handle on your retirement assets.
Look at what you’ve accumulated to date and how much longer you’ll want – or need – to work. Think about what rate of return you’ll need to fill the gap between what your budget requires and what your guaranteed income provides. I always suggest using conservative rates of return, such as 4% while working and 3% during retirement years; if you get more, it’s a pleasant surprise, but you aren’t setting yourself up for disappointment. Keep in mind your personal risk tolerance – how much you can afford to lose and how much loss you can handle emotionally without panicking. If you’re working with a financial adviser, have him stress test your portfolio to see how your money would fare in a financial crisis like the one we had in 2008-09. Keep in mind that once you’re no longer contributing to your retirement accounts, a serious loss can be devastating.
4. If you’re married, give some thought to what will happen to the surviving spouse when one of you dies.
You probably know that the lower Social Security check will go away. Sometimes, so, too, does a pension payment; even if the pension participant chose the joint survivor option, the payment could be reduced. The surviving spouse could struggle financially as well as emotionally. Think about how you’ll replace that income – with life insurance or some other source.
5. Keep in mind the high cost of health care and long-term care.
Americans are living longer, which is wonderful, but it could mean more bills down the road for prescriptions, vision and dental care and long-term care if you or your spouse suffers from dementia or a chronic illness. According to the latest Genworth Cost of Care Survey, the median monthly cost for adult day health care was $1,473 in 2016; for an assisted living facility, it was $3,628; and for a private room in a nursing home, it was $7,698.
To find out the costs of long-term care in your area, check out the Genworth survey here. You also can check out AARP’s Long-Term Care Calculator. You also can find out what Medicare will and will not cover here, along with options for handling those costs.
Once you’ve done your research and have a written plan, think about talking to a financial professional (preferably one who specializes in retirement income and who is a fiduciary) about what to do next. Or, if this all just seems too overwhelming, start there. But don’t put it off any longer.
And the next time you see a news story about Baby Boomers and retirement, you can shake your head and be glad you are prepared. Because you’ve got this!
Kim Franke-Folstad contributed to this article.
-
New 2026 Income Tax Brackets Are SetIncome Tax The IRS has adjusted federal income tax bracket ranges for the 2026 tax year to account for inflation. Here's what you need to know now.
-
Claiming the Standard Deduction? Here Are Five Tax Breaks for Retirement in 2025Tax Tips If you’re retired and filing taxes, these five tax credits and deductions could provide thousands in relief (if you qualify).
-
Where There's a Will, There's a Way Your Assets Will Be Distributed as You WishYour will is the backbone of a strong, adaptable estate plan that ensures what you leave behind goes to your selected beneficiaries. Without a will, state laws determine who gets your assets.
-
I'm a Financial Adviser: This Is What You're Really Losing if You Cut Back on Your 401(k) ContributionsMissing out on the benefits of the employer match and compounding growth could force you to work longer and lower your standard of living in retirement. Here are some alternative options.
-
Preferred Bank Stocks: The Investment Retirees (and Others) May Be Missing Out OnMost large banks issue preferred stocks that pay out fixed dividends, often with higher yields than bonds. Should you make room for them in your portfolio?
-
Don't Let Your Equity Compensation Trip You Up: A Financial Expert's GuideStock options, RSUs and other executive perks can come with some serious strings attached. To avoid a nasty tax surprise, you need a plan.
-
The Spendthrift Trap: Here's One Way to Protect Your Legacy From an Irresponsible HeirA spendthrift clause in an estate plan can protect an inheritance from a financially irresponsible child's debts and poor decisions.
-
Adapting to AI's Evolving Landscape: A Survival Guide for BusinessesLike it or not, AI is here to stay, and opting out could be disastrous for your organization. Instead, focus on what you can control and be flexible, as AI is still evolving.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy InvestingInvesting in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
Escaping the New Golden Handcuffs: A Financial Expert Has a Plan for Today's ExecutivesFeeling stuck in your job? It could be your complicated compensation package, but it also could be where you live, your family or even how you view yourself.
