I am always surprised by how many of my clients think “retirement” means “age 65.” Retirement is not an age or a number. I like to help my clients define what retirement means to them by introducing them to the following idea:
“Retirement is the point at which you have enough passive income to wake up in the morning and decide to work…or not.”
With that definition in mind, most people begin to look at their “golden” years a little differently.
How do you define retirement? Will you be working…because you want to? Will you travel, do philanthropic service, or take care of grandchildren? Will you start the business venture you always wanted to?
To have the passive income you need to make your retirement dreams
come true, you need to decide NOW what retirement means to you and when you want it to happen. Keep in mind that if you retire early, you may not have enough income to enjoy the years ahead, but if you retire late, you may not have enough years to enjoy anything you’ve worked for.
After you’ve determined what “retirement” means to you and when you want to do it, you may want to consider some of the following in putting a plan in place to make it happen:
1. Life Expectancy: The typical 65-year-old today will live to age 83; that’s the standard life expectancy for older people now. Those who are younger can expect to live even longer than age 83. And in fact, those in the 20s and 30s could live longer in their retirement years than they actually spent working! Remember that as you age, the chances of your health deterioriating go way up, so you’ll need to have a medical/health cushion as part of your retirement planning so you can take care of any problems before they get out of hand, increasing your chances of enjoying your later years.
2. Social Security: While most younger people don’t have a lot of expectation when it comes to receiving benefits when they retire, it’s still a good idea to know what your benefits could be. You can go online to www.socialsecurity.gov and learn more about what to expect based 
on your age. Also, if you need and want to receive Social Security benefits while continuing to work, you’ll want to check out Publication No. 05-10069 from the Social Security Web site.
3. Medicare: Even if you don’t plan to receive monthly benefits, you should sign up for Medicare three months before you turn 65. Otherwise you could be charged higher premiums when you actually do go to use it. For information go to www.medicare.gov.
For the best way to forecast what will happen to you in retirement, I recommend the Money Mastery financial planning software, available at www.moneymastery.com. This is powerful! It includes retirement planning calculators and worksheets and a cash flow analysis module that shows you how long your retirement funds will last into your desired retirement period.
