Is It the Right Time to Retire?

Tools for tracking expenses

While Mint – one of the most popular budgeting apps – is no longer available, there are lots of other choices. These two useful reviews may help you choose one that will be a good fit for you:

• nerdwallet.com/article/finance/best-budget-apps
• experian.com/blogs/ask-experian/best-budgeting-apps/

If you want a more robust tool that combines tracking your spending, net worth, and investment performance along with planning tools for debt reduction, life events, and income taxes, check out Quicken Classic. Compare its several versions to choose the one that has the range of tools and accounts that you need. First-time users may get a discount when purchasing a 1-year subscription directly from Quicken, but the best deals for renewals may come from Sam’s Club or other big-box stores. Caution: If you see a super deal, be ware: it may be an older version (i.e., 2022) that will not include online services such as connecting to your online accounts.   

Envelope budgeting can also be a useful approach. Wikihow has a good explanation.

The Employee Benefits Security Administration – part of the US Department of Labor – has an excellent publication called Savings Fitness that you can order as a printed copy or download as a PDF. In the appendix, you’ll find several great worksheets to print and fill out. Worksheet #5 is the Cash Flow Spending Plan. There’s also an online, interactive version of the worksheets. If you register (scroll to the bottom of the page), you can save your work to update or review later.

Social Security Benefits

Set up a mySocialSecurity account at www.ssa.gov/myaccount/.

Social Security fact sheets for specific situations:

• SSA Publication 05-10069, How Work Affects Your Benefits (https://www.ssa.gov/pubs/EN-05-10069.pdf)
• Social Security Administration. Windfall Elimination Provision, SSA Publication No. 05-10045. Available at http://www.socialsecurity.gov/pubs/10045.html or 1-800-772-1213.
• Social Security Administration.  Government Pension Offset, SSA Publication No. 05-10007. Available at http://www.socialsecurity.gov/pubs/10007.html or 1-800-772-1213.

Social Security benefit calculators: See a complete list of the available calculators at ssa.gov/benefits/calculators/.

• Use your actual earnings history already on file with Social Security http://www.ssa.gov/estimator/.
• Enter your earnings information manually http://www.ssa.gov/retire2/AnypiaApplet.html
• Government pension – WEP version: http://www.ssa.gov/retire2/anyPiaWepjs04.htm

To evaluate different claiming strategies, you’ll need to use a commercial or privately developed calculator. Both of these receive high marks from me and other financial professionals. Try Open Social Security first. If you’re close to the age where you need to make a decision, then invest $40 for Maximize My Social Security to confirm and compare all your options:

• http://www.maximizemysocialsecurity.com/ ($40 fee/year)
• opensocialsecurity.com/ Free

Net worth calculators and forms.

• The Employee Benefits Security Administration’s Savings Fitness publication also has a form to fill calculate your net worth. Look for Balance Sheet in the appendix of the printed and PDF versions, or use the  interactive version. If you register (scroll to the bottom of the page), you can save your work to update or review later.
• Quicken and some of the more sophisticated budgeting/money management apps will calculate your net worth if you link them to all of your accounts, or manually enter the value for each account or asset.
• Financial planning tools provided by the custodian of your retirement plan, IRA, or other investment account will likely have a way to do this, too.

Retirement income calculators:

• https://www3.troweprice.com/ric/ricweb/public/ric.do This tool is more detailed than many, and intuitive to use. It has been recommended by reviews in the popular press for many years.
• Vanguard’s Retirement Income Calculator lets you fill in basic info such as your age, years to retirement,  annual earnings and savings to see whether you are on track. You can then adjust the inputs to see the impact of reducing spending, delaying retirement (reducing the # of years your money needs to last), or changing your asset allocation.
• NerdWallet’s Retirement Calculator asks for much of the same information as Vanguard’s, but it spells out its assumptions – and let’s you change them. The results are presented as a graph comparing where you should be from your current age all the way through age 95, which can be eye-opening. As with the Vanguard calculator, play with the calculator to see how changes in spending, retirement age, etc. will impact the result. 

Retirement Cash Flow Projection

Download my Retirement Cash Flow Projection spreadsheet to see how your income and expenses will compare over the first ten years of retirement. This is the same spreadsheet that you have in your handout, if you attended my workshop on this subject. The first sheet is an Example, and it is locked so that you cannot edit it. Go to the second sheet, Create Your Own Spreadsheet, to edit the sheet as you wish. Scroll down to create a second scenario, to test how changing your retirement date, the amount of savings or expenses, or other changes will impact the amount of money you need to pull from savings.