Darrow Kirkpatrick - Can I Retire Yet?: How to Make the Biggest Financial Decision of the Rest of Your Life

Do-It-Yourself Retirement

Can I Retire Yet?

How to Make
the Biggest Financial Decision
of the Rest of Your Life

Darrow Kirkpatrick

CAN I RETIRE YET? Copyright 2016 Darrow Kirkpatrick. All rights reserved.

Other than brief quotations in reviews, no part of this book may be reproduced or distributed in any manner without express written permission from the author.

StructureByDesign

Chattanooga, Tennessee 37405

ISBN: 978-0-9892830-3-8

www.CanIRetireYet.com

Dedication

To those who question

Disclaimer

The content here contains personal opinions of the author regarding financial and economic matters. It is for educational purposes only. The publisher and author do not imply or intend any guarantee of accuracy. The information here is not necessarily suitable for every individual: Use it at your own risk. No guarantees are made that you will achieve results similar to those described here, or any specific results whatsoever from using the concepts and approaches discussed. No guarantees are implied or expressed. Though reasonable effort has been taken to make this material as useful as possible, there may be typographical mistakes or errors in the content. Neither the author nor the publisher is engaged in rendering professional services including, but not limited to, accounting, tax, legal, or investment planning. This information is not intended as a substitute for such professional services. If specific advice is needed or appropriate, the reader should seek out and engage a licensed professional. The author and publisher specifically disclaim any liability, loss, or risk taken by readers who directly or indirectly act on this information. You are solely responsible for your own decisions and actions, and their results.

Contents

INTRODUCTION

In preparing for battle I have always found that plans are useless, but planning is indispensable. General Dwight D. Eisenhower

Youve worked a long time. You may have lived frugally, saved diligently, paid for college, paid off the house. Your investments are doing well, and the markets seem relatively stable, for now. Youve amassed more assets than you dreamed possible, and yet you hesitate. Will it be enough?

You run retirement calculators and solicit opinions. Some financial advisors say you need millions. Others whove done it say you should quit earlier, while you still have your health and can enjoy life. You analyze and ponder, but you still cant seem to make the retirement decision. So you keep working, hoping that more money will guarantee a secure retirement, and more time will make the decision easier. Another year passes, and its the same story.

Could this be you? Its a familiar story in discussions I have with readers and others. There is a lack of certainty around the retirement equation for everyone. Just how much do you need? If you have a steady pension, or many millions, then you can retire with few worries. But the vast majority of us will never know with absolute certainty that we have enough money set aside. Sure, you can pay a financial planner to crunch your numbers and create some fancy reports with reassuring-looking graphs. And, after a few years, if that long, events will take a different course and youll realize it was all pure speculation.

An old television commercial showed prospective retirees going about their daily tasks with their number (the amount they needed to save in order to retire) hovering over their heads. While there is nothing wrong with having a specific target, just dont put too much stock in it. The future is far too uncertain over the 30- to 40-year time span of a modern retirement to believe that there is a static number or system that will keep you safe and secure for every possible outcome.

Yet the question lingers: Can I retire yet?

I faced that puzzle some time ago, managed to solve it, and left my secure career behind with confidence. Did I figure out precisely how much money I needed to safely retire? No. Because, as I will explain later, that is technically impossible. But I did make peace with a reasonable answer, decided to retire, and have no regrets today, years later. You can too.

Paradoxically, the question How much is enough to retire? may not have an exact answer. But, the question Am I well enough prepared for the future that I can leave my full-time job? is one that does. The math may be indefinite, but you can still make a definite decision.

This book is about that decision as much as it is about an answer. Its about how I made that decision, and what Ive learned since. During the accumulation years, and now as an early retiree, I learned to focus on the current reality knowing exactly where you are and what forces are in play. Then you can take the best possible action for your current stage in life, and the years that will follow.

Whether you are retiring early, or at a more traditional age, the future remains uncertain. Very few of the baby boomers or succeeding generations will achieve the level of wealth needed to banish every possible financial concern in retirement. But many of us those who have worked hard, lived prudently, and prepared diligently will have the tools necessary to be comfortable and secure for the rest of our lives.

In my experience, retirement is a gateway, not a destination. The retirement years can potentially be the most fulfilling period of your life. By planning in advance as best you can, starting prepared, and making the most of whatever comes, you can ensure those years will be the best possible!

Overview

The chapters that follow show how to assess your retirement expenses and income, as well as navigate your way through the retirement years, without needing to fully predict the future. Ill be presenting research to reinforce key points, and offering rules of thumb to organize and streamline the process as much as possible. There are no absolute answers. But there are wise behaviors to employ, including, among others, diversification, prudence, and flexibility.

This book is for anyone who intends to pilot his or her own ship during retirement. Doing retirement planning and money management yourself is usually the surest way to maintain your financial independence, because it costs less, and is tuned to your own needs and capabilities. Your nest egg represents your accumulated life energy, and your future freedom. In most cases, there is no one who can exercise the same care and wisdom with your wealth that you can. So, I strongly encourage you not to relinquish the key decision-making for your money.

We are about to explore all the most relevant issues and factors in trying to answer the question Can I Retire Yet?

The book is divided into five main sections. In the first section we size up your retirement expenses the first half of the fundamental retirement equation. We consider whether youve dispensed with, or prepared for, various major life expenses, and then analyze how much it will cost you to live in retirement. Finally, we investigate three potentially serious threats to your retirement lifestyle: health care cost and availability, inflation, and taxes.

In the second section we turn to your retirement income, which must cover those retirement expenses. We briefly touch on pensions, which a diminishing few of us will enjoy. Then we turn to Social Security which will be an essential income stream for most modern retirees. Can you count on it and, if so, how much? Next, we review your life savings or investment portfolio, which must be able to fill in any gaps in the previously considered income, by generating dividends and growth. We also review the philosophical and practical differences between relying on stock market probabilities via an investment portfolio versus safer insurance products for retirement income. We discuss how to create a guaranteed lifetime income stream using an annuity. Finally, we consider how to integrate these income streams and supplement them by working part-time in retirement a financial and emotional necessity for many.