Ready to retire? 5 questions to ask Making the decision to retire is a big one - here's how to know if you're ready. Your browser does not support this video. 03-04-2019 Video Transcript Transcript (Image) Illustration of an older woman, nearing retirement age. (Text on Screen) Ready to Retire? 5 Questions to Ask (Image) Question on red background (Text on Screen) Do you have a retirement budget? (Image) Split screen showing retirement-ready factors, including a location pin, a to-do list check mark box, and an illustrated bill with 70% written on it. (Text on Screen) It depends on: Where you live What you plan to do Financial advisors say you should PLAN ON NEEDING 70% OF YOUR PRERETIREMENT INCOME. (1) (Disclaimer) (1) http://www.bankrate.com/finance/retirement/study-seniors-incomes-dont-go-far-enough.aspx (Image) Question on red background (Text on Screen) Will Your Income Last? (Image) Split screen that shows how to calculate income by breaking down sources of income. (Text on Screen) Try to estimate how much you might need each year in retirement to help ensure your income will cover expenses. Sources of Income for Retirees Age 65 and Older (2) 33.2% Social Security 32.2% Earnings 20.9% Retirement Accounts (Pensions, 401(K), IRAS) 9.7% Asset Income 4% Other (Disclaimer) (2) https://www.ssa.gov/policy/docs/chartbooks/income_aged/2014/iac14-text.html (Image) Money stacking up (Text on Screen) If you're worried you might fall short, CONSIDER MAKING CATCH-UP CONTRIBUTIONS to your retirement accounts or continuing to work part time. (Image) Question on red background (Text on Screen) What's Your Social Security Strategy? (Image) Timeline showing age of retirement and how Social Security benefits increase by +8% every year after age 65 until 70. (Text on Screen) You can start collecting Social Security at age 62, BUT WAITING UNTIL AFTER YOUR FULL RETIREMENT AGE INCREASES YOUR BENEFITS BY 8% EACH YEAR UNTIL AGE 70. (3) (Disclaimer) (3) https://www.ssa.gov/planners/retire/1943-delay.html (Image) Timeline showing monthly benefit increases at age 62, 66 and 70. (Text on Screen) Monthly benefit increases (4) (Assuming a $1,000 benefit at the full retirement age of 66) Age 62: $750 Age 66: $1,000 Age 70: $1,320 (Image) Question on red background (Text on Screen) How Will You Spend Your Time? (Image) Graphics showing how people spend retirement: clock illustrates time with family and friend and suitcase illustrates traveling. (Text on Screen) Consider how you'd like to spend your Newfound freedom and how it will impact your budget. The top two goals for retirement are: -Spending time with friends and family -Traveling Only 14 percent have FACTORED TRAVEL INTO their overall RETIREMENT SAVINGS PLAN. (5) (Disclaimer) (5) https://www.transameriacenter.org/docs/default-source/resources/travel-survey/tcrs2013_sr_travel_and_aging.pdf (Image) Question on red background (Text on Screen) Do You Have a Plan to Pay for Health Care? (Image) Split screen illustration showing healthcare expenses of a 65-year old couple. (Text on Screen) Health care is a major retirement expense. Healthy 65-year old couple (retiring this year) $377,412 expected amount spend on health-related expenses during retirement (6) 70% of people over 65 will need long-term care at some point. (7) (Disclaimer) (6) http://www.hvsfinancial.com/PublicFiles/2016_RHCC_Data_Report.pdf (7) http://longtermcare.gov/the-basics/ (Image) Illustrated medical first aid box with a magnifying glass. (Text on Screen) Look at your family medical history and your own health to estimate what your costs might be. (Image) Silhouette of a State Farm agent. (Text on Screen) Having a plan in place is key for a successful transition into retirement. For guidance on how to achieve the retirement lifestyle you envision, Talk with your State Farm agent. (Image) State Farm® logo (Disclaimer) State Farm (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates) is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites hyperlinked from this page. State Farm has no discretion to alter, update or control the content on the hyperlinked, third party site. Access to third party sites is at the user's own risk, is being provided for informational purposes only and is not a solicitation to buy or sell any of the products which may be referenced on such third party sites. Making the decision to retire is a big one - here's how to know if you're ready. Do you have enough money saved to fund your needs post retirement? How will retirement affect your family life? People's jobs constitute a major part of their identity; do you have interests you'd like to pursue in your newfound free time? We offer guidance on what to consider.