Copyright 2010 MarketWatch.com Inc.All Rights Reserved
May 27, 2010 Thursday 12:35 AM EST
SECTION: PERSONAL FINANCE; Retirement; Robert Powell
LENGTH: 998 words
HEADLINE: Ready for retirement? Here’s your checklist
BYLINE: Robert Powell, MarketWatch mailto:firstname.lastname@example.org
BOSTON (MarketWatch) — What does it take to make the move from a working life to retirement, and to make that move successfully?
Not unlike the planning involved in any trip, you need a checklist to make sure you have everything you need to get from one place to another. That’s what the experts at MetLife’s think tank for retirement have just created — a to-do list to make the trip into and through retirement.
The good news is that pre-retirees need only complete 15 tasks before taking off, according to a MetLife study produced in conjunction with MetLife’s Retirement Readiness Workbook.
The tasks have to do with five big categories: 1) work, 2) leisure time and activities, 3) relationships with family and co-workers, 4) obtaining employer and federal benefits, and 5) planning for the future.
“The problem is that people don’t know where to start,” John Migliaccio, director of research for MetLife’s Mature Market Institute, said in an interview. “This assessment is geared to help you figure how ready you are for retirement.”
Here’s a look at the tasks MetLife has identified.
Deciding on whether to and how long to continue working is a primary decision about retirement. More than one in two surveyed (54%) said they had formulated ideas about how much to work in retirement, according to the study.
The big tasks with regard to work include:
Bob Skladany, founder of Able Workers Inc. said the ability to resume or continue working during “retirement” is still the most significant variable workers may be able to control.
“Disability and illness notwithstanding, and that’s a big notwithstanding, retirement work income can offset pension, savings and investment deterioration,” Skladany said.
Health and physical condition can be a major issue, Skladany said. “Physical capacity to continue to work appears to be a major factor affecting what type and how much work is feasible as we age,” he said. “A major portion of the workforce performs manual or physically demanding work. It’s particularly important that people who will need work income during retirement have assessed their physical capabilities and made an effort to deal with chronic or limiting conditions.”
Skladany said questions about work definitely need to be addressed before one reaches retirement age, and while there’s still time to complete training and preparation for new fields.
“Based on the hundreds of age 50-plus workers I’ve dealt with, failing to be practical about real employment alternatives is the biggest obstacle,” Skladany said.
Leisure and activity
For many, retirement means a chance to kick back, enjoy the grandkids, tend to the garden, and travel a bit. But according to MetLife, just one in two pre-retirees has taken the time to figure out the “proper balance between work and leisure time if forced to choose” and a similar percentage of those surveyed said they had identified personal goals in retirement.
But both of those tasks – determining the proper balance between work and leisure time and identifying your personal retirement goals – are important to make sure you enjoy leisure in retirement.
As might be imagined, the relationships you have with family and co-workers play a big role in making the transition from pre-retirement to retirement. Many would-be retirees keep working because of the friendships they have at work. Many spouses intentionally retire at the same time — or not. “It’s not insignificant,” said Migliaccio. “People tend to focus on the financial stuff, but relationships are very important.”
Important, yes. But also tasks that many pre-retirees haven’t addressed yet. The MetLife study noted that fewer than half surveyed have completed tasks associated with relationships with family and co-workers.
The two main tasks in this category: Consider the importance of your relationships with co-workers when making a decision to retire. And consider how the various aspects of your retirement might positively or negatively affect the relationships you have with your family and friends.
For his part, Skladany said the evidence keeps piling up that continuing to work is good for you physically, emotionally and financially. “Selection of a retirement job with a high ‘social’ component meets many retirement and life objectives,” he said.
Income and benefits
Older workers aged 60 to 64, those within five years of retirement, and retirees have put significant effort into determining what’s necessary to receive corporate and government retirement benefits, according to the study.
According to Migliaccio, getting a handle on your benefits, especially your health insurance in retirement is an important part of the planning process. In some cases, you might need to keep working to maintain your health insurance.
Here are tasks associated with income and benefits:
The hard part about planning for retirement is you really don’t know the span of the plan. It could be one year or 30 years or even more.
“It’s hard, it’s a big unknown,” Migliaccio said.
But that doesn’t mean you shouldn’t create a plan and, especially, contingency plans. According to Migliaccio, the checklist can help assess how ready you are for retirement not just now, but also while you are living in retirement. Indeed, he said the checklist doesn’t end when you start the trip into retirement. “It’s a process that continues and always needs tweaking,” Migliaccio said.
What are the tasks you need to look at? They include:
Time will tell
One more thing: Don’t worry if you haven’t completed these tasks yet.
“As individuals move closer to retirement, regardless of age, they complete more of the tasks,” MetLife’s study showed. “Those within five years of retirement have completed an average of eight tasks compared to those six to 15 years from retirement (five tasks), and those 16 or more years from retirement (three tasks).”
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