Roughly less than a third of folks nearing retirement believe they will have enough money set aside to maintain their lifestyle. That means 7 out of 10 people (i.e., 70%) believe they will not have enough money to enjoy the same standard of living in retirement. It does not need to be this way. Here is the first thing you should do to increase your chances of living the retirement that you dream of:

Put together a a retirement budget or a financial plan detailing your expected income and your desired goals (from where you want to live to how often you want to travel).

Once you have committed this budget to paper, then it is time to test drive your budget. Live on your retirement budget for a couple of month before beginning retirement and see how it goes. If it works, great! If you budget falls short of your actual expenses, you either need to cut back or find additional income.

Here are some ways to generate additional income in retirement:

• save more money while you are working (both taxable and tax-deferred accounts)

• retire later (this one provides the double benefit of not drawing down your retirement savings early on while also allowing for additional contributions to your retirement accounts)

• adjust your investments to reflect your appropriate asset allocation (stock/bond/cash mix)

• work part-time in retirement

• generate some rental income from properties you own

The truth is, retirement is going to cost more than most of us think (e.g., healthcare costs are increasing 5% a year). With the average Social Security benefit coming in under $18,000 per year, a $60,000 household has a $40,000+ shortfall to make-up. Assuming a 4% withdrawal rate, anything less than a $1,000,000 retirement portfolio will not meet your retirement expenses. If these are questions you are asking yourself, then contact a financial planner (www.mynmfp.com/new-clients) because we can help to put you on the right path!

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