Have you been hesitant to retire this year because of all that is going on in the world? On this episode of Retirement Starts Today, we’ll explore a retirement headline from Maurie Backman at The Motley Fool called 3 Reasons Why 2022 May Be a Bad Year to Retire, but then you’ll hear my rebuttal to each of her 3 arguments.
If you have been on the fence about whether you should take the plunge and retire now, you won’t want to miss this episode. Make sure to stick around until the end of the episode to hear an anonymous question about how to be certain that you won’t owe interest and penalties on a Roth conversion.If you have been on the fence about whether you should take the plunge and retire now, you won’t want to miss this episode. Click To Tweet
Outline of This Episode
- [2:11] Pitfall #1 – The pandemic is still raging
- [5:00] Pitfall #2 – Inflation is rampant
- [8:15] Pitfall #3 – Stability is important
- [12:23] An underpayment penalty question
Retire when you feel ready, not when the world events settle down
Maurie Backman at the Motley Fool wants you to reconsider retiring in 2022, but I disagree. I want to ensure that my listeners feel comfortable retiring when they are ready rather than when world events dictate they should feel ready.
Proper planning can ensure that you feel ready to retire. Listen in to hear why you should still retire on your own timeline in spite of the obstacles the world throws at you.Listen in to hear why you should still retire on your own timeline in spite of the obstacles the world throws at you. Click To Tweet
With the new variant, the pandemic is still raging
Maurie argues that with new variants the pandemic still limits options for travel and other activities.
I disagree! You can begin your amazing retirement even in the midst of a global pandemic. Even though planning a trip to Europe may continue to be a challenge for the next several months, you can still plan trips around the USA.
Inflation is rampant
The cost of living is higher than ever and if you have created a retirement budget you may have to start over based on the current rate of inflation. Regardless of the fact that Social Security accounts for inflation, Medicare Plan B premium rates continue to rise, which may negate any raises in Social Security.
While these are valid points, even though inflation is unpleasant, it isn’t insurmountable. By using the guardrails method of spending, you’ll understand when you need to increase or decrease spending to account for inflation. Increasing stock exposure can also help with future inflation so that you can be better prepared for the next cycle.
You may only get 30 years of retirement with just 20 of those being active years. Will you really regret retiring when you wanted to when you reach the end of the road?
Hopefully, you have planned ahead and have some extra reserves. If you have a healthy stock allocation and a flexible spending plan you can retire when you are ready, not when inflation says you should.If you have a healthy stock allocation and a flexible spending plan you can retire when you are ready, not when inflation says you should. Click To Tweet
Stability is important right now
Maurie Backman contends that since the past two years have been so stressful it would be wise to continue with your routine this year until the pandemic and the economy settle down.
There will always be a reason to delay retirement. Taking the plunge into retirement will never feel completely safe. You cannot control the events that the world throws at you. What you can do is prepare.
Listening to this show is a great start to ensuring that you are prepared for retirement. Make sure that you are signed up for the Everyday Is Saturday newsletter to get even more quality information to help you conquer your retirement fears.
Resources & People Mentioned
- The Motley Fool – 3 Reasons Why 2022 May Be a Bad Year to Retire
- Taxes in Retirement Facebook group
- Underpayment of Estimated Tax on the IRS website
- Estimated Taxes on TurboTax’s website
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