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How to Tell If You’re Ready to Retire

By U.S. News & World Report

I retired when I was in my mid-50s, the day my boss walked into my office, handed over the dreaded manila envelope and told me to clear out my work space by the end of the week. Fortunately, I knew it was coming because it was no secret that my company was facing hard times, and so I had time to prepare.

But suppose you’re lucky enough to choose the timing of your own retirement. How do you know you’re ready and that it’s finally time to take the leap? You’re probably thinking in terms of money. Can you afford to retire? Of course that’s important, but it’s not the only issue. Here are five questions to answer before you enter retirement.

1. Do you have something else to do? The biggest difference between working and being retired is that you no longer get up, get dressed and go to work five days a week. Now you have to fill your own time and structure your own day. That’s easy if you have a passion outside of work — whether it’s playing in a band, writing your memoirs or roaming the golf course. If you don’t have an inborn passion, then you need to recognize that retirement is a new stage of life, and you probably want something to do, especially if you’re retiring early. Some people take on a part-time job, while others volunteer in the community. Ask yourself what you really like to do, what engages your interest, and realize that finally here’s your chance to do it, no questions asked.

2. Are you ready to pass up more money for more freedom? In all likelihood, you will have less income after retirement. So you know you’re ready to retire when you reach the stage in life when you’re happy to live on less in order to live where you want and the way you want. Experts say you need 80 percent of your working income to retire comfortably. But many people retire on less, because their desire for free time outweighs their need for more material goods or their impulse to keep up with the Joneses. They just want enough time to enjoy retirement, and they’re willing to adapt their lifestyle to the resources they already have.

3. Do you want to spend more time with your family? It’s almost a cliché, but for many people it’s true, especially when it comes to grandchildren. According to a study from Fidelity Investments and the Stanford Center on Longevity, over 60 percent of retirees cite spending time with grandchildren as a major reason for retiring. But be careful. According to that same study, spouses often have different views about spending time together. Some 60 percent of husbands say they want to spend more time with their wives, while barely 40 percent of women want to spend more time with their husbands.

4. How is your health? Health issues are very personal. Some people with a chronic disease, or a family history of heart disease, may want to take early retirement to enjoy life while they can. Others may have to hold onto a job to keep their health insurance. Regardless, you should understand Medicare and have your retirement medical insurance in place before you leave any employer sponsored plan. But if you suffer from a lot of stress at work, then retiring may actually improve your health. In fact, almost two thirds of retirees cite stress as a significant motivating factor in deciding when to retire. Retirement may also give you the extra free time to do more exercise and prepare healthier meals.

5. Can you afford to retire? Finances are not the only reason to retire, but they are important. Make an estimate of what your new lifestyle is going to cost. Include extra expenses for travel and health care. But also consider that you no longer need to save part of your income or support your children, and you can make adjustments to your living arrangement, including possibly moving to a lower cost area of the country. Then count up your resources from Social Security, a pension, an IRA or 401(k) plan and wherever else, and try to make them match up. You can’t possibly account for every penny — there are too many unknowns — but you should have some degree of confidence that you can pay your way through this new adventure called retirement.

Tom Sightings is the author of “You Only Retire Once” and blogs at Sightings at 60.

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How to Tell If You’re Ready to Retire originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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