22 Jul I’m 64 and considering retirement. Can I afford it?

Q. I’m not happy with my job. I’m 64 and I could retire, but I don’t know if I can afford to. I don’t take Social Security yet and I have no pension — just my 401(k). How can I figure out if I have enough? I don’t want to take a part-time job or anything.
— Still working

A. How you can determine whether you can afford to retire is something we all have to contend with.

It will take a serious review of your needs and your sources of income.

Having a financial plan in place prior to retirement can help reduce the anxiety of knowing whether or not you have enough to retire, said James Suazo, a chartered financial consultant with Baron Financial Group in Fair Lawn.

He said there are general guidelines but meeting with a financial planner who understands your goals and resources — and who can hold you accountable to your plan — can benefit you in retirement.

Financial planners can help you plan for more than just retirement, Suazo said. They can offer their expertise when it comes to other money decisions such as taking Required Minimum Distributions (RMDs), Social Security timing, tax planning and more.

It’s important to understand how financial advisors are paid before you hire one.

“There are advisors that get paid by the hour or for a flat fee, and others that offer ongoing advice and management for a percentage of assets under management (AUM),” he said, noting that some also sell insurance or investment products such as annuities and for those, they would be paid a commission.

When it comes to choosing a financial planner, Suazo said he recommends looking for a fee-only Registered Investment Adviser.

“Fee-only refers to how the advisor is compensated. Fee-only financial advisors may be paid hourly, as a retainer or as a percentage of assets under management. Fee-only Advisors are never compensated from the sale of a product,” he said. “Registered Investment Advisers have a fiduciary duty to act in their clients’ best interests.”

To look for a fee-only planner, you can check www.napfa.org.

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This story was originally published in July 2024.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.