Create a Realistic Retirement Plan

Bryant and Ethel Denise Greene of Detroit are unsure when they¹ll retire. AARP Michigan has developed a free workshop, “Ready for Retirement? Tools to Increase Peace of Mind,” on retirement planning. — Photo by Bryan Anselm

Bryant Greene, 55, isn't one to shy away from opening his 401(k) statements, even amid the fluctuating markets of the past few years.

The attorney for a health care corporation logs into his family's financial accounts at least once a day, strives for an age-appropriate mix of stocks and bonds, recently opened Roth IRAs and feels pretty good about his investing prowess.

See also: Retirement: 3 big questions.

Still, Greene, of Detroit, isn't sure when he and wife Ethel Denise, 47, a registered nurse who works for the same company, will be able to retire. They haven't discussed expectations about how to fill their time, how to handle health care issues and how much they might pay toward college for son Caleb, 13.

"That's a conversation we just haven't had yet," said Greene, a Detroit resident. "Given the nature of our careers, we both have options in terms of perhaps working part time or other approaches. But we haven't discussed it," said Greene.

The Greenes aren't alone. According to a survey by the Employee Benefit Research Institute, 42 percent of those polled last year said they determined their retirement needs by guessing.

Gail Hodge, 70, believed she had established a solid strategy based on her decades of experience as a Realtor in suburban southeast Michigan.

In addition to her own Garden City colonial, she invested in eight rental properties in Detroit suburbs. Before the real estate crisis, she said she could have sold them and walked away with $300,000 to add to her nest egg. Now, she's $200,000 underwater on the properties and with her income about one-quarter of its former level, can barely afford the mortgage payments.

She does the repairs and maintenance herself — painting, minor electrical work, lawn mowing and snow shoveling — because she no longer has the cash to hire contractors.

"I had hoped to be traveling at my age," she said. "But that got scrapped. Now I'm just hoping by the time I'm 75 I can give this up."

People like Hodge, who are revamping their vision, may benefit from seminar segments about working in retirement, cutting current expenses, budgeting for crises and the special concerns of women in retirement.

Developing a vision

Helping people develop a vision for their later years is the goal of an AARP Michigan workshop that will be held around the state.

"Ready for Retirement? Tools to Increase Peace of Mind" will offer a 10-point approach to retirement planning. The workshop will be offered four times; the first one will be April 24 in Grand Rapids. It is free, but reservations are required. Call 1-877-926-8300 toll-free. Additional dates, times and locations are posted on the AARP Michigan website.

It emphasizes thinking about factors specific to you — from hobbies to health to family obligations — in order to make informed decisions about when to stop working full time, what age is best to collect Social Security benefits and how to create a realistic retirement spending plan.

"It's a holistic approach," said Melissa Seifert, associate director of economic security for AARP Michigan. "Health, well-being, community — it's important to create a budget that includes all of these components.

"It's not all about the money; t's what your desired outcome is."

The presentations build upon several online calculators offered by AARP — including a Social Security benefits calculator that lets users plug in marital status, post-retirement employment plans, lifetime earnings and other factors that can influence plans for when to receive benefits.

"If you are looking toward retirement in the next 10 to 15 years, we really encourage you to be thinking about these things," Seifert said.

Next: Retirement calculator. »