Armchair Millionaire Community Bulletin: Working Your Way Through Retirement

Working during the retirement years is an appealing option for many people but if thats your intention, be realistic about how much income a working retirement could bring in. Plan for that lifestyle just as you would any other retirement goal and recognize that may need to support your lifestyle with money you save today using retirement accounts.

New York, New York (PRWEB) September 13, 2005 -- The oldest of the baby boomers are on the verge of retirement, so lots of people are thinking hard about how theyll spend their retirement years. And many of them plan to work, at least on a part-time basis. A survey conducted by Merrill Lynch earlier this year found that 76 percent of those surveyed plan to do some kind of work during their retirement.

Our own recent survey of the Armchair Millionaire community found that many are planning active retirements that include a variety of jobs. Here are three comments we heard:

I'd like to travel a lot when I retire, but I'd also like to work part time--not at my current job--but something slower paced and more fun!" --Kristi

I plan on spending my retirement giving back. I'd like to volunteer work in the area of special education. I'll maybe do a little consulting to have extra money to help others but for the most part I will continue with the work I love but will be doing it without pay." --mmyers

Health permitting, I plan to work part time at a book store (I'm in IT now) and do some traveling. I hope working part time is out of interest rather than necessity, but plan to use the small income to live off of and avoid withdrawing from my retirement savings." --YJ

Its easy to dream about how youll send those golden years. Its entirely another to make those dreams come true. An important step is being realistic about how much a retirement job will really contribute to your overall retirement needs. Use my reality check to ensure that youre on the right track.

The Armchair Millionaires Reality Check for Working During the Retirement Years

Will it really be enough? Many people figure that a part-time income will be sufficient to meet expenses during retirement. But tread carefully here. Sure, youll have a social security check coming in, but will that be enough to make up the difference? (Hint: If youre living paycheck to paycheck now, as many Americans do, your honest answer will have to be no.") If youll come up short, consider other income sources, such as a reverse mortgage to tap your home equity, and downsizing to reduce your expenses.

Will you really command as much in the job market as you think? That survey by Merrill Lynch reported that 56 percent of those who plan to work during retirement plan to move into a completely new career. If this includes you, move carefully. As a new entrant to a new field, youre unlikely to earn as much as in your old job. Thats fine, of course--as long as you arent planning on bringing home the same paycheck as before.

Are you sure you can make a new business fly? The Merrill Lynch study found that 13 percent of those surveyed planned to start their own business when they retire." Again, be careful here. Many new businesses require a year or two before they generate positive cash flows (and some never do at all), so be prepared to cover your income needs during that time.

Do you really think youll work forever? At some point you will stop working, either because you want to or you have to. And at that point you will need other income sources to fall back on. This means its extremely important to stash away what you can now into tax-advantaged retirement savings plans, such as 401(k)s and IRAs.

THE BOTTOM LINE: Working during the retirement years is an appealing option for many people but if thats your intention, be realistic about how much income a working retirement could bring in. Plan for that lifestyle just as you would any other retirement goal and recognize that may need to support your lifestyle with money you save today using retirement accounts.

THE ARMCHAIR MILLIONAIRE WEEKLY SURVEY: Is the U.S. economy headed for a crash? Log on to www.armchairmillionaire.com and let us know.

Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, The Armchair Millionaire, was published in 2001. Schiff's newest report, "How to Know When You Are Rich," is now available at www.armchairmillionaire.com.

CONTACT INFORMATION:
Lewis Schiff
Armchair Millionaire
877-833-2823
http://www.armchairmillionaire.com

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