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The Basics Q&A: Can I Afford to Retire?

Q: What retirement? I don't feel like I'll ever be able to retire.

A: A lot of people share your concern, and why shouldn't they? After all, people are living longer. Health care costs are rising. Who knows what the future might hold? The best way to deal with all of these uncertainties is to have a clear vision for how you want to live in retirement—and then develop a plan that could help you achieve those goals.

Answered by:

ml_Lorna-abbia_70x90

Lorna Sabbia Head of Retirement & Personal Wealth Solutions at Bank of America Merrill Lynch

Even a well-thought-out plan, though, can come up short. You may find that you need to make some tradeoffs as you transition into retirement. Could a more modest home help fulfill a goal of seeing the world, for instance? You might decide to work a few years longer, or start a business, to boost your retirement income. If you decide to work a few years longer, you won't be alone—people expect to delay retirement by an average of four years, according to a 2013 Merrill Lynch/Age Wave study, Americans' Perspectives on New Retirement Realities and the Longevity Bonus.

A study Merrill Lynch conducted with Age Wave the following year, Work in Retirement: Myths and Motivations, found that nearly three out of five retirees launch into a new line of work, and enjoy the work they do more in retirement. That study also found that nearly three-fourths of people over 50 want to continue working in some form in retirement.

As you approach retirement, you'll also be faced with a lot of complex decisions—about Medicare, Social Security and how to manage your assets in a way that could help them last. Do all that you can to learn about your choices and the timing for each of them.

Even with all the unknowns, one thing is certain: As life changes, so will your goals. Retirement isn't something you "set and forget," and you'll no doubt have to make adjustments along the way. So have a plan—but be flexible and stay informed about all of your choices. One good place to start is by reading A Path to Retirement Success.

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We'll answer frequently asked questions here.

3 Questions to Ask Your Advisor

  1. Should I be more focused on growth in my investment strategy?
  2. How can my partner and I maximize our Social Security benefits?
  3. Is it too late to purchase long-term-care insurance?

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This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation, offer or solicitation for the purchase or sale of any security, financial instrument, or strategy. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.

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