Dollar Stretcher Article: Will you be a highly successful retiree?

By: Gary Foreman

Retirement affects everything you do. It's the biggest change in your lifestyle since you moved out on your own in your teens or twenties. Bigger than getting married, having kids, sending them through college.

You've worked hard for years. And now you're supposed to be able to take it a little easier. But the truth is that most of us are not nearly prepared for retirement.

The late Dr. Covey stated, "If you want to make minor, incremental changes and improvements, work on practices, behavior or attitude. But if you want to make significant, quantum improvement, work on paradigms."

Let's look at the paradigms of highly successful retirees to see what we can learn from them.

Successful retirees know that you can spend your way into trouble. They recognize that their income has limits. So expenses need to have limits, too.

They also know that you don't have to keep track of every single dime. There's no need to drive yourself crazy keeping track of the small stuff. This isn't about squeezing every last cent out of life.

You can keep track of your expenses by reviewing your monthly credit card statements and ATM or cash withdrawals.

You know that you need to make sure that your annual expenses don't exceed your income. And, if you're running close to your income (like most of us), you'll want to make sure your income is enough to cover expenses on a monthly basis.

Successful retirees don't make guesses about their income. They know how much they'll have each year and the source of that income.

Your retirement income will likely include some of the following:

Social Security

pension

retirement accounts (401K, IRA, etc.)

savings and investments

part-time work or hobby income

Take the time to estimate how much income you'll receive from each on a monthly and annual basis.

Some may vary a little. But you should be able to get a close estimation of what your monthly and annual income will be.

If you have not yet gotten serious about retirement planning, this retirement planning spreadsheet from SimplePlanning.com can help you get started while you still have time to plan for a comfortable retirement.

Many people feel that they're forced into retirement too soon because of a job loss in their late 50s or early 60s. They have trouble finding a job with similar pay and begin to take Social Security as soon as it's available to them. That can be a critical mistake.

Working at even a lower paying job will provide more income than Social Security. And every year you delay taking Social Security increases your monthly check by about 8% when you finally do start to collect.

Will you leave thousands of dollars on the table by taking Social Security at the wrong time? Find out.

If you really can't find work, need immediate income and want to delay Social Security, consider a reverse mortgage. You can borrow against the equity of your home, using that for current expenses while delaying the start of Social Security income.

Successful retirees know that Medicare doesn't pay for everything. According to a survey by Fidelity, the average couple will need $280k for uncovered medical costs.

Paying attention to your health can reduce your medical costs. A balanced diet and regular check-ups are just two things that you can do to maintain good health.

Successful retirees know that if you don't use it, you'll lose it. It may be tempting to just chill out and relax, but you'll be doing yourself a favor if you stay active.

According to a retirement study,"Keeping the brain active can keep mental deterioration at bay and even stave off depression, researchers found."

One way to keep your mind active is to spend time reading each day. Whether you read your daily paper, a novel or an informative email newsletter like After 50 Finances you'll be forcing your brain to process new material.