As an educator with a passion for your career, you may have mixed feelings about retirement. Not only is it difficult to leave a profession you truly love, but, if you’re like most Americans, you’re likely also concerned about whether you can actually afford to retire.

While it’s common for educators to delay their retirement planning, starting early creates many benefits. Not only will it allow you to fully understand the position you’re in right now, but it will also allow you to develop strategies and begin making adjustments where needed. As you begin planning for your retirement, there are many important things to consider. Here are a few of the most important.

Evaluating Your Income Needs

The first step to answering the question, “Can I afford to retire?” is to gain a full understanding of your anticipated income needs after you stop working. This starts with estimating your basic expenses, like food, debt payments, and other living expenses. Then, you’ll want to add in lifestyle expenses, which may include travel, entertainment, gift-giving, and charitable donations. Take some time to really think about what your dream retirement looks like and how much it will cost to achieve your goals. 

Next, consider the income sources you can expect during retirement. This may include Social Security, pensions, and income from rental properties and part-time work, for example. If your anticipated income is less than your projected expenses, you’ll need to take steps to address your retirement gap.  

Covering Healthcare Expenses

Healthcare expenses continue to rise and failing to plan ahead can put a wrench in your retirement plans. As you plan for your retirement, consider whether you’ll need to cover healthcare costs before you’re eligible for Medicare. You’ll also need to include anticipated out-of-pocket expenses that you'll have to pay throughout your lifetime.

When anticipating these costs, it’s important to factor in your age, your health, and your family medical history. Also consider whether you’re eligible for any post-retirement healthcare plans through your employer. Remember that even after you’re eligible for Medicare, you’ll still have to spend a portion of your income on Medicare Part B and Part D premiums, copays, co-insurance, deductibles, and drug costs.

Addressing Retirement Gaps

If you find that you have a retirement gap, don’t panic. Some adjustments can help close the gap. The earlier you begin your retirement planning, the more options you’ll have. For example, you may be able to increase your savings rate, delay your retirement, or continue doing some part-time work during your retirement.

Depending on your goals, you may also close the gap by downsizing your home or reducing your living expenses. Remember that your adjustments don’t necessarily have to be drastic. Often, you can balance out your retirement finances by combining a few of these options in a way that fits within your comfort zone.

The Case for Professional Advice

If you're feeling overwhelmed with planning for your retirement, you’re not alone. While it’s a good idea to consider the factors above and get a rough idea of your current and projected financial situation, there truly is no substitute for professional advice.

A professional advisor can help you evaluate your situation from a new perspective and may bring your attention to things you hadn’t previously considered. Objective information and skilled strategic planning are critical during the pre-retirement and retirement stages of life. We believe this is a great way to ensure you’re taking the right steps toward being able to enjoy the retirement you imagine.

Start Your Retirement Journey Today

Hopefully, this has inspired you to start thinking about the things you can do today to help position yourself for a confident retirement. For a deeper look into some of the most important factors educators need to consider before retirement, download our free “Retirement Questions for Educators” guide. It covers information including tips for deciding when you can afford to retire, understanding educator retirement plans, weighing the pros and cons of early retirement, and more!

Once you download your guide, you may find that it raises even more questions. If so, contact the professional advisors at Bangerter to schedule an appointment. We’ll help guide you every step of the way!

This is for informational purposes only, does not constitute as individual investment advice, and should not be relied upon as tax or legal advice. Because investor situations and objectives vary this information is not intended to indicate suitability for any individual investor. Investments in securities involve a high degree of risk and should only be considered by investors who can withstand the loss of their investment. Prospective investors should carefully review the “Risk Factors” section of any prospectus, private placement memorandum or offering circular. Please consult the appropriate professional regarding your individual circumstance. Investment advisory services offered through Bangerter Financial Services, Inc. A state Registered Investment Advisor. Registered Representative and securities offered through Concorde Investment Services, Inc. (CIS), member FINRA/SIPC. Bangerter Financial Services, Inc. is independent of CIS.