Money Moves for the New Year: Gearing Up for Retirement
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What is the main topic discussed in this episode?
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Here's your money briefing for Friday, December 27th. I'm J.R. Whelan for The Wall Street Journal. Welcome to the final installment of our series, Money Moves for the New Year. This week, we've taken a look at your questions about meeting financial goals in 2025. We've looked at boosting your credit score and paying off debt, leveling up your career, and saving for a big purchase. But before we start the new year, today we're discussing getting your finances in order to retire. And retirement looks different for everyone.
I think it's going to start out as just doing nothing, get that pinnacle.
That's Daniel Paul. He's 60 years old and lives in Boulder, Colorado. Throughout his career, Daniel has worked in advertising and marketing for a few different companies. Now he's a vice president of marketing for a multi-state cannabis company. In the next phase of his life, he wants to slow things down.
But knowing my personality, I'm going to get very bored very quickly. I'm still young. I still feel young.
Daniel is looking to retire in the next few years. His wife plans to work a bit more, but his long-term idea of retirement includes the two of them seeing the world.
We would like to go travel. We'd like to go experience things. We don't have this extravagance of a new home somewhere else. We like where we live. I think we'd like to go to Fiji. I think she'd like to go to Japan. I think we'd like to look at more off-the-beaten-path places.
How does Daniel describe his retirement goals and lifestyle plans?
But to get to Fiji or Japan, Daniel wants to make sure he's taking all the right steps in his last few working years to ensure smooth sailing into retirement.
And naturally, he has some questions. Number one, which I think everybody has, is How long will my money last? What can I do to make it last as long as possible? So that's the big thing is, how do I spend it wisely when I have no more money coming in?
He also wants to know about pulling money out of his savings and the big T word, taxes. But we'll get to that later. Let's talk about taking those first steps toward retirement. Whether you're set to retire in 2025 or just began working, Daniel's question about making your money last holds up. And before you go spending away as a retiree, you want to build up your savings as much as possible. So I talked to my colleague, Ann Turgason. She writes about retirement here at The Wall Street Journal. How could somebody gauge if they have enough money saved away? What are some questions they should ask themselves or their financial advisor?
Right. So as people get closer to retirement, they probably have a better sense of what they're going to need, by which I mean, how much are they going to spend, say, per year? And so if you're two years away from retirement, that's probably a question you can ask. answer with some degree of confidence. I'd say the first thing to do is look at your spending, try to figure out what's going to remain. Are there certain things that you're no longer going to be spending money on? So try to get a ballpark sense of what's a reasonable amount that you're going to expect to spend with the idea that we all have these unexpected, non-recurring expenses, like maybe you need to maintain your home and your roof and
needs help. And then on the flip side, you need to answer the question of what kind of income can you reasonably expect in retirement? And a good place to start with that is at the Social Security Administration. They will give you an estimate of what kind of benefits you're likely to get. And as you get close to retirement, you can get a pretty precise estimate of Social Security benefits. And then, you know, you call your company. If you're entitled to a pension, they should be able to give you an estimate of what that pension is going to be. And you should also ask whether it's adjusted for inflation or not.
We've also heard stories of retirees who take on part time jobs to fill in the gaps.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–1:44
2
How does Daniel describe his retirement goals and lifestyle plans?
1:44–8:42
3
What are Daniel’s top concerns about making his money last in retirement?
8:42–13:23
4
How should you estimate whether you have enough saved for retirement?
13:23–15:06
Speakers
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