Are you ready to retire?

Yesterday I gave a sneak preview of this article when I inadvertently discovered a shortcut for posting in blogger (I was trying to use the shortcut for italics and think I discovered that control and p will automatically post your blog…). I assure you it was not a tease; it was a twitch. Ha! Anyhow, onto the story.

MSN Money has a pretty interesting article up – 15 things to do before you retire. In the article, after a brief introduction, it offers the list of “how to tell if you are ready to retire.” Let’s dig in.

Not surprisingly, in my early 30s I’m not ready to retire. Booo! That’s OK. I’ll start planning now and checking things off the list! Just for fun I’ll give myself a grade next to each one.

Here is my grade scale:

A (signed, sealed, delivered (I’m yours) – anyone else now have that song stuck in their head? Sorry about that. But I figured you could suffer with me. Plus, it’s better than The Duck Song.);
B (I’m on my way);
C (Haven’t started yet – I have time);
D (Haven’t started yet – probably (or definitely) should have by now); and
F (oh gosh, I never thought of that).

You’ll note most of my grades are around a C, which is fine based on my age. But it’s important to start to think about this stuff when you have time to plan without rushing. Here’s the list (and my report card):

Establish a retirement budget (C);
Examine your cash flow (C);
Size up your nest egg (B). I do this all the time. But it’s based on current numbers plus inflation. So I gave myself a B. I could have given myself a C, but it’s the thought that counts, right?;
Develop a withdrawal strategy (C);
Minimize taxes (D). I gave myself a D because my tax-advantaged retirement planning is limited to maxing out my 401(k). The rest of my retirement savings is done without any tax advantage. I need to pay more attention to that while I’m fairly young. Unfortunately I don’t qualify for some of the best stuff out there, but that’s OK. I’ll figure out a way!;
Maximize Social Security (D). This grade was hard. I could have given myself anywhere from an A to an F and it would have made sense. Basically my view is to plan (for now) without consideration of social security. I don’t know what it’s going to look like when I’m at social security retirement age (whatever that may be as I get close…). So because I don’t pay much attention to social security I gave myself a D;
Get health care coverage (C);
Prepare for long-term care (F). I could have given myself a D because I’ve been through this analysis with my parents. But I haven’t even considered this for me. It’s early for sure. But I’m a tough grader on myself;
Consider new activities (A). Yay! Finally an A! I’ve been compiling this list for a while, mentally. Maybe I’ll put it in writing in a future post;
Join a social circle (B). I’m on my way for this, too. But I’m not as close as with number 9, so a B is probably more appropriate. I’m in a few networking groups with folks of all ages. I do most of my socializing outside of work, too. So I’m on my way with this one;
Coordinate with your spouse (B). We’re pretty good with this. We want to retire early, so we talk about this from time to time. But I can’t say we score an A on this though;
Pick out a place (C). I actually could have given myself a B, but C is probably better. We’ve looked at buying a “weekend” home close to our families that has good “retirement home” qualities. But that’s about it. We’re thinking about it, but I wouldn’t say we’ve “started.” We have time;
Protect your emergency fund (A). Sing it with me. Signed, sealed, delivered, I’m yooours! I realize it’s with my current emergency fund. But we have a plan with our emergency fund in FDIC-insured accounts. Here is a little more about that;
Pay off all debts (B). You know my student loan plan. And the plan is not much different if and when we buy a house and with our rental properties. No mortgages by when we retire. I promise that this won’t be us!; and
Take a practice retirement (F). I like this one. I’ve never thought of doing it though. I did have the opposite this year, sort of. I took a couple weeks off of work (which is like an eternity if you know me). And I really enjoyed that time. So I think I’ll try this when I’m close to retirement to see how it goes. Good stuff.

So there you have it. 2 As, 4 As, 5 Cs, 2Ds and 2Fs. Not too shabby for a guy in his early thirties. And I got some motivation to pay a little more attention to something I haven’t paid enough attention to so far for retirement – #5. So that’s good.

How do you score? Anyone ready to retire who didn’t think they were? That would be something fun to find out on a Monday morning wouldn’t it?!?!

Of course, you still need to put your credit card down and slowly step away from the mall!