As I help several baby boomers in our family better prepare for their upcoming retirements, I'm learning more about the items that might be necessary to have on hand to help with this process. Since I'm working on retirement plans for two individual boomers, I'm seeing similarities in the items that we have to review in an effort to get them prepared for their golden years. While a few such items are really no-brainers, there are certain others that I hadn't fully considered as parts of retirement planning since they aren't part of my own family's plan, so this is ending up to be somewhat of an education for me as well as them.
Social Security Benefits Statement
Those of us in our younger years may not have the benefit of receiving our annual Social Security statement in the mail, having to go to the Social Security Administration's website and create an account to see our estimated benefit amounts. However, those who are in or nearing retirement may still get such statements mailed to them. Therefore, being able to pull out copies of these statements and review estimated benefits based on various ages has been helpful in determining not only what these boomers will be receiving in benefits, but what they could be receiving if they delay their retirement by several years.
One of the boomers with whom I'm working will be receiving a pension. When discussing this aspect of retirement with this particular boomer, it came to my attention that there were several years in which the pension was not paid into and that could be made up for by way of a lump sum repayment into the plan. However, before jumping the gun and making that payment, it was decided that this particular baby boomer would meet with a pension plan representative not only to determine the exact amount that would need to be paid back but the difference it would make in monthly distribution amounts so that we could determine just how long it would take to earn back that additional payment amount over time.
Pulling out a regularly used budget during retirement planning can help to form what will eventually be a retirement budget. Looking at current numbers can help to cut out certain costs or add in other costs that could come with retirement. Unfortunately, neither baby boomer that I am working with had a really well-defined budget. Therefore, this meant that we had to review a variety of other statements that I'll get to next in order to create such a budget.
Debts Statements and Regular Bills
The two boomers with whom I am working were quite different in their debt-related situations. One has absolutely no debt -- not even a mortgage -- while the other one has substantial outstanding bills relating to a mortgage, credit cards, and student loan payments for children.
These are pertinent aspects of a financial situation for which to plan, especially when considering retirement. They can add payments beyond the regular bills that arrive each month. When building a budget for each of these boomers' retirement future, it was also necessary to consider and review regularly arriving bills such as utilities, insurance, property taxes, food expenditures, and similar items to build an overall picture of their financial outflow each month.
Retirement/Savings Statements/Other Assets
But simply knowing how much will be going out each month won't do us much good if we don't know what will be coming in. Besides Social Security and pension earnings, it's helpful for me to know what possible other assets will be there in retirement to help foot the bills. From retirement and savings accounts to certificates of deposit and bonds, having statements to know what other asset totals are there either as buffers or to be drawn down against in retirement has helped complete the overall picture we need to provide these boomers with an all-encompassing look at their retirement situation and point out any areas of improvement upon which we need to focus.
*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
More From This Contributor:
- Employment & Career
- Politics & Government
- baby boomers