New Jersey Named One of the Places Where Retirement Planning is Most Important
It costs a lot to live in New Jersey. It costs a lot to retire there, too.
Retirement planning is important no matter where you live, but it’s especially imperative to start planning and saving as early as possible if you live, work or plan to retire in New Jersey, or some combination of the three.
Because New Jersey residents spend considerably more than the national average on things from rent and mortgage to groceries, travel, healthcare and recreation, retirement planning can be a bit more challenging and complicated.
According to one survey, retirees in New Jersey spend an average of $2,540 on monthly expenses, compared to the national average retiree spending of $2,008, a difference of 26 percent. A large chunk of those monthly expenses goes toward housing, and a significant percentage of New Jersey retirees are still making mortgage payments.
The high average cost of housing in New Jersey can make it more difficult to save for retirement during working years. For those who own their own homes, New Jersey’s notoriously high property taxes can also make it harder for residents to plan and save for retirement. But there are things you can think about and do now that can help make it easier.
Foran Financial Group has been helping families throughout New Jersey plan for their futures for more than a combined 58 years. We understand the issues residents face and offer personalized, intensive financial planning and full-service wealth management in a personal, supportive environment. Our multi-generational planning and investment team has helped hundreds of families pursue and maintain greater financial confidence.
Here are a few factors to consider.
Looking for a financial advisor in New Jersey? Contact Foran Financial Group to see how we can help.
Determine When to Retire
When determining the right time to retire, ask yourself these questions:
- Can I afford the lifestyle I want without working?
- Am I ready to stop working?
If the answers to both are yes, then it’s time to start the process of transitioning to this next phase in life. If the answer to either question is no, talk with your financial advisor, do some recalculating and set or adjust a retirement goal.
Decide When to Draw Social Security Benefits
If you are eligible and need Social Security now, then the time to begin taking your payments is now. If you can afford to wait, for each year you wait to draw Social Security benefits after you become eligible at age 62, your monthly payment will increase until age 70.
Talk with a financial advisor (Jersey) to determine the best time for you to begin collecting Social Security. Making the wrong decision about these benefits can cost thousands of dollars over time.
Consider Healthcare Costs
Healthcare costs are a significant and often-overlooked factor for saving in retirement, and not planning for medical coverage and expenses can be catastrophic. Healthcare costs continue to increase, and prescriptions, long-term care and other healthcare-related expenses can add up quickly.
Retirement Plans – Have They Been Affected by COVID-19?
Can you still retire as planned pre-Coronavirus or should you push your retirement date? The answer may depend on how close you are to retirement age.
A Forbes survey indicated that 11 percent of survey respondents, most of them between 45 and 54 years old, said circumstances related to the COVID-19 pandemic would require them to continue working longer than they had originally planned.
There could be a number of reasons to retire a little later: Your income may have decreased due to a temporary job loss during the pandemic, and you may have lost the ability to contribute to retirement savings. Perhaps your 401(k) took a big hit when the market dropped in response to the global pandemic, or your employer announced they were temporarily suspending the practice of matching employee 401(k) contributions. Or maybe you had to take a distribution from your retirement savings to help with medical bills after being diagnosed with COVID-19, or to cover monthly expenses after losing your job.
If the impact of COVID-19 has you concerned about your retirement savings or your ability to retire on schedule, talk to the financial advisors at Foran Financial Group about how you might be able to alter or adjust your plan to stay on course.
Consider Other Options
There are options when it comes to retirement.
While some people simply retire completely, others will start a small business or take on a part-time job that can offer some additional income, possible benefits and the added bonus of giving them purpose and something to do.
Another alternative is to retire and find ways to cut expenses or live more frugally than perhaps you planned. Set and stick to a budget, downsize your home, take advantage of senior discounts and reconsider your travel plans and entertainment expenses.
For more ideas, read our recent blog post: Use Downtime to Think About Retirement.
Why You Should Start Planning and Saving Early
The earlier you establish a retirement goal and start working toward it, the more likely you’ll be to reach that goal. The main reason for this is time. The longer you have to save, the more money you’ll be able to set aside, the more interest your accounts will compound and the more balances will grow.
Another reason to start thinking about retirement as soon as possible: The market can be more favorable for long-term investors. In other words, short-term market volatility doesn’t affect your bottom line as much if you’re investing for the long-term.
The First Step
If you haven’t started retirement planning, finding a financial advisor to work with is a great first step. If you’ve started saving but need to fine-tune your retirement planning, a professional can help you develop or improve your retirement strategy, set goals, overcome hurdles and address any questions or concerns you may have with regard to retiring in New Jersey – or anywhere for that matter.
Retirement planning is simply too important to put off.
The financial professionals associated with Foran Financial Group may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.